Beasley Media Group, which is in the midst of a cost-reduction initiative that encompasses on-air entertainer retirements, job losses and the sale of non-essential stations, has until December 31, 2027, to pay down its debt.
Yet, even if the radio broadcasting company led by CEO Caroline Beasley repays nearly every dollar on loan, the publicly traded entity’s debtholders could still walk away with 80% of the company.
That’s the math embedded in a charter amendment filed June 4 and signed by Ms. Beasley, the daughter of the late George Beasley, who founded the radio station licensee 65 years ago.
The amendment legally enshrines a conversion pathway into Beasley’s certificate of incorporation. Here’s how: holders of a majority in aggregate principal of the company’s senior secured notes may elect, at the end of 2027 or upon an event of default, to convert what they’re owed into equity representing 95% of the company on a fully diluted basis.
That leaves current “BBGI” shareholders with 5%. Beasley shares, which trade on the Nasdaq market, were poised to open Monday’s trading at $21.09 per share. That’s a remarkable two-month gain, as “BBGI” was priced at $3.14 at the closing bell on April 7. Fueling the gain — meme stock recommendations that have brought back “BBGI” to pricing not seen since August 2023.
While the social media soothsayers inflate Beasley shares, lienholders are now just 1 1/2 years away from a likely ownership scenario of a company that owns such properties as WBZ-FM “98.5 The Sports Hub” in Boston; WMGK and WMMR in Philadelphia; WRIF and WCSX in Detroit; and WQYK and WRBQ “Q105” in Tampa, among other properties.
How much of the original principal Beasley retires in cash prior to the deadline impacts the ownership conversion percentage. Debtholders will get 90% ownership if Beasley pays back at least 85% of the principal, 85% if it pays back at least 90%, and 80% if it pays back at least 95%.
PIK interest accruals, which compound as additional principal rather than requiring cash payments, do not count toward those thresholds.
The only scenario in which current shareholders retain full control is complete retirement of all outstanding notes plus all accrued PIK interest before the deadline.
At the center of the arrangement are $98,475,254 in 10% Senior Secured Second Lien Payment in Kind Notes that emerged from April’s debt restructuring. The exchange retired $15.9 million in First Lien Notes and swapped $184.1 million in Second Lien Notes at 50 cents on the dollar for the new PIK Notes, reducing total debt from approximately $220 million to approximately $110 million.
A NEW LOOK TO BEASLEY’S BOARD
The restructuring also reshaped Beasley’s boardroom.
Jeffrey Goldberg fills a newly created independent director appointment secured by noteholders as a condition of the transaction support agreement. Simultaneously, Beasley formed a Strategic Alternatives Committee, a body that typically oversees a formal review of options, including asset sales, mergers, or recapitalizations. Goldberg is its first named member.
The charter amendment additionally requires unanimous board approval, including sign-off from the noteholder-designated director, before Beasley or any affiliate can initiate a bankruptcy filing.
— Additional reporting by Adam R Jacobson
