Audacy, the troubled radio and audio-streaming firm, stated Sunday it filed plans for Chapter 11 chapter reorganization to slash its debt.
Audacy is the second-largest radio broadcaster within the U.S. (after iHeartMedia) with 235 owned radio stations throughout 48 markets. The corporate’s stations embrace L.A.’s KROQ, KNX and KRTH; New York’s WFAN sports-talk radio and 1010 WINS; Atlanta’s V-103 (WVEE) and 92.9 The Sport (WZGC); San Francisco’s Alice (KLLC) and KCBS; and Seattle’s KISW.
By way of the restructuring, Audacy expects to remove about $1.6 billion of funded debt — a 80% discount from roughly $1.9 billion — to $350 million. The Philadelphia-based firm stated it filed prepackaged Chapter 11 proceedings within the U.S. Chapter Court docket for the Southern District of Texas on Jan. 7, 2024. Audacy’s debtholders will obtain fairness in reorganized firm. Audacy expects the court docket will maintain a listening to to think about the approval of the chapter plan in February and to emerge from chapter as soon as regulatory approval is obtained from the FCC.
David Area, Audacy’s chairman, president and CEO, cited a “excellent storm” of macroeconomic challenges for the chapter reorg.
“Whereas our transformation has enhanced our aggressive place, the proper storm of sustained macroeconomic challenges over the previous 4 years dealing with the standard promoting market has led to a pointy discount of a number of billion {dollars} in cumulative radio advert spending,” Area stated in an announcement. “These market components have severely impacted our monetary situation and necessitated our steadiness sheet restructuring. With our scaled management place, our uniquely differentiated premium audio content material and a sturdy capital construction, we imagine Audacy will emerge nicely positioned to proceed its innovation and development within the dynamic audio enterprise.”
Audacy stated it expects to “proceed working its enterprise within the atypical course with out disruption to its advertisers, distributors, companions or workers. Audacy expects to function usually throughout this restructuring course of beneath its present management crew.”
Based in 1968 as Entercom Communications, the corporate modified its title to Audacy in 2021. In 2017, Entercom acquired CBS Radio — which owned 117 stations nationwide — and giving it the Radio.com digital audio platform. In 2019, the corporate purchased podcast corporations Cadence13 and Pineapple Road Studios.
Throughout the Chapter 11 course of, a few of Audacy’s present lenders have dedicated to supply $57 million in debtor-in-possession financing, comprised of $32 million of a brand new time period mortgage and a $25 million upsize of the corporate’s present accounts receivables financing facility from $75 million to $100 million, the corporate stated. Audacy stated that, pending the chapter court docket’s approval of its chapter plan, the debtor-in-possession financing and the corporate’s money from operations and accessible reserves it expects to have the capital to “fulfill commitments to workers, advertisers, companions and distributors.”
Audacy’s inventory was delisted from the New York Inventory Change in November 2023. The corporate’s shares will proceed to commerce over-the-counter beneath the image “AUDA” by way of the Chapter 11 reorganization course of. The shares are anticipated to be canceled and obtain no distribution as a part of Audacy’s restructuring, the corporate stated.
PJT Companions is performing as funding banker, FTI Consulting is performing as monetary adviser and Latham & Watkins is performing as authorized counsel to Audacy. Greenhill & Co. is performing as monetary adviser and Gibson, Dunn & Crutcher is performing as authorized counsel to the debtor-in-possession financing lenders and the advert hoc group of first lien debtholders. Evercore Group is performing as monetary adviser and Akin Gump Strauss Hauer & Feld is performing as authorized counsel to the advert hoc group of second lien debtholders.
