OAKLAND, Calif. — Underwriters for Pandora Media Inc.’s planned initial public offering have extended the online music service a $30 million credit facility, according to the company’s new prospectus filed with regulators Thursday.
Affiliates of J.P. Morgan Securities LLC and Morgan Stanley & Co. are lenders under the facility. Those firms are leading Pandora’s IPO alongside Citigroup Global Markets Inc.
The new facility replaces an earlier facility and equipment financing line that the Oakland, Calif.-based company received in 2009. The company said it drew down $9 million of the new facility on May 13, the day the company received it and retired the earlier loans.
Pandora, which sells advertising and subscriptions for its music streaming service, said it secured the new credit facility with its personal property. This includes accounts receivable but not intellectual property, it said.
More than 90 million users have registered for Pandora’s service as of April, the company said, up from 80 million in January. Despite the rapid adoption, the company isn’t profitable and doesn’t expect to be so in the next fiscal year.
Last year it posted narrower losses of $1.8 million on greatly increased revenue of $137.8 million. But in the first quarter of the year, the company is already in the red by $6.8 million despite significantly higher revenue of $51 million.
Harming the bottom line were its ongoing hiring binge — the company had 359 employees at the end of April, up from 295 three months earlier — as well as higher royalty payments resulting from increased user activity.
Pandora has financed operations with more than $50 million in venture capital. Part of the proceeds of the IPO will go to pay about $29.7 million in accrued and unpaid dividends on the company’s convertible preferred stock.
The company plans to list on the New York Stock Exchange under the symbol “P.”