The United States Bankruptcy Court for the Southern District of Texas on Tuesday approved Audacy Inc.’s Plan of Reorganization.
With the plan approved, Audacy expects to emerge from the Chapter 11 process after the company obtains approval from the FCC.
“Today’s announcement marks a powerful step forward for Audacy, positioning the Company for an exciting future,” David Field, Chairman, President and CEO of Audacy, commented in prepared remarks released late Tuesday. “As expected, we have achieved a speedy confirmation of our prepackaged Plan, which will enable Audacy to pursue our strategic goals and opportunities in the dynamic audio business. We aim to drive accelerated growth and financial performance, capitalizing on our scaled, leadership position, our uniquely differentiated premium audio content and the robust capital structure that we will have upon emergence. I also want to express my gratitude to our team, who continue their outstanding work to serve our listeners and customers with excellence and fulfill our commitments without missing a beat.”
As Audacy sees it, the company now traded as an Over-the-Counter stock with George Soros holding the majority of its publicly traded shares, operates “one of the country’s two scaled radio broadcasting groups,” as well as one of the country’s largest podcast studios, the Audacy direct-to-consumer streaming platform and multiple audio networks.
Audacy is also a major event producer and a digital marketing solutions provider and, in its words, “is the unrivaled leader in local news and sports radio.”
Ironically, it is the acquisition of many all-News stations through the Reverse Morris Trust-fueled merger with CBS Radio that led to the need for a restructuring. In Los Angeles and New York, FM simulcasts of KNX and WINS, respectively, were done in order to make the brands future-proof even as calls for AM radio’s permanent place on the dashboards of all U.S. vehicles became one of the NAB’s biggest regulatory missions.
With a restructuring all but complete, the emergence from debtor-in-possession status will enable Audacy “to continue its strategic digital transformation and capitalize on its position as a scaled, leading multi-platform audio content and entertainment company differentiated by its exclusive, premium audio content.”
As previously reported, under the approved plan Audacy will equitize approximately $1.6 billion of funded debt, a reduction of 80% from approximately $1.9 billion to approximately $350 million.
Trade and other unsecured creditors will not be impaired.
With a flurry of docket entries seen in the Houston federal bankruptcy court on Tuesday afternoon, Judge Christopher López also granted permission for Audacy to sell two Boston-area properties in the Boston market for $3.5 million and $11.1 million, respectively.
As previously reported by RBR+TVBR, this reflects property associated with a parcel currently home to three radio station towers associated with WEEI-AM 850 and located in the upscale, leafy suburb of Needham, Mass.; and the 83 Leo M. Birmingham Parkway facility in Brighton, Mass., that is home to Audacy’s Boston stations.
The latter sale includes a two-year leaseback arrangement for Audacy at a monthly rent of $40,000. The anticipated closure date is March 6.
PJT Partners is acting as investment banker, FTI Consulting is acting as financial advisor and Latham & Watkins LLP is acting as legal counsel to Audacy.
Greenhill & Co., LLC is acting as financial advisor and Gibson, Dunn & Crutcher LLP is acting as legal counsel to the DIP financing lenders and the ad hoc group of first lien debtholders.
Evercore Group, LLC is acting as financial advisor and Akin Gump Strauss Hauer & Feld is acting as legal counsel to the ad hoc group of second lien debtholders.
Audacy voluntarily elected to file for Chapter 11 bankruptcy protection on January 7, in a move that was widely expected by industry observers.
This action led many general-interest news organizations to focus on one key bankruptcy emergence development: Soros Fund Management will become Audacy’s principal shareholder as it has acquired more than $414 million of Audacy’s senior debt, surpassing other key investors. This stake constitutes about 40% of Audacy’s total senior debt.
For some industry observers, this could bring liberal and Democratic-focused news and spoken word programming to its all-news stations, which in a pivotal presidential election year has been put under a magnifying glass. It is a reprise of fears associated with former TelevisaUnivision radio stations now under Latino Media Network ownership, resulting in significant staff changes at legacy Spanish-language spoken word AMs in Miami.
LMN acquired 17 radio stations in ten cities from TelevisaUnivision in a $60 million transaction which saw Latino Media Network secure debt financing from an investment entity affiliated with Soros Fund Management LLC.
Efforts to thwart regulatory approval of the transaction were made, and subsequently denied by the FCC.
— With reporting from Adam R Jacobson in Boca Raton, Fla., and Cameron Coats in Troy, N.Y.
