Audacy Inc. has disclosed to the Securities and Exchange Commission that it has worked out a grace period extension with a lender, giving it more time to pay interest on its 2029 Notes without defaulting.
The audio content creation and distribution company concurrently entered into two other grace periods of varying lengths, as it learned that any return to trading on the NYSE won’t be happening anytime soon.
On Friday, “Audacy Capital Corp.” and Deutsche Bank Trust Company Americas signed off on paperwork that extends the grace period to pay the interest on the 2029 Notes from 30 days to 60 days.
It’s a second extension for Audacy and was anticipated; the SEC filing did not appear until Monday morning. As such, the company now has until November 29 to pay the $18 million that it was supposed to have paid by September 30 on its 6.75% senior secured second-lien notes, which are due in March 31, 2029. The indenture was agreed to in March 2021.
Audacy EVP Andrew Sutor IV signed off on the paperwork regarding the Deutsche Bank extension.
As Audacy tells the SEC that it “continues to engage in discussions with its creditors with respect to a number of potential alternatives regarding a restructuring of the company’s outstanding indebtedness,” two additional grace periods have been initiated, which is an option Audacy has had.
First, a 30-day grace period has been put into motion for Audacy’s 6.5% senior secured second-lien notes due May 1, 2027. This means the company need not worry about paying interest in the amount of approximately $15 million that is due on November 1 until December begins.
Second, and perhaps more pertinent to the company, is a three business-day grace period to a seven-year-old credit agreement established with JPMorgan Chase Bank N.A., which serves as the administrative agent for this line of credit. Interest payments in the aggregate amount of approximately $17 million due Tuesday (10/31) will now be due Friday — pending any additional extensions, should they be necessary.
With $50 million in interest payments pending and the principal amount standing still with respect to fund repayment, Audacy as of June 30 had just $80,667,000 in cash on hand, down from $103,344,000 at the close of 2022.
The company’s long-term debt at the end of Q2 2023 stood at $1.92 billion, up from $1.88 billion at the end of 2022.
Meanwhile, NYSE Manager of Market Watch & Proxy Compliance Daniel Contrastano on Monday (10/30) submitted a “Form 25” form with the SEC that serves as a formal notification of removal from listing and/or registration of Audacy’s Class A common stock.
The notice solidifies a May 16 decision by the NYSE to halt trading of “AUD” and proceed with a delisting due to a failure to meet the exchange’s minimum trading requirements. In particular, Audacy’s shares were trading at what company executives in an internal memo termed an “abnormally low selling price.” Audacy shares had not been in compliance since June 28, 2022. However, Audacy had appealed the NYSE determination to commence delisting proceedings.
The official delisting of “AUDA” will become effective on or around November 10.
Trading on the NYSE for “AUD” began on April 9, 2021, when 53 years as Entercom ended with a virtual COVID-19 pandemic-era Opening Bell ceremony featuring key company leaders including President/CEO David Field. As the Closing Bell rang, “AUD” finished at $5.15 per share. Today, Audacy shares are traded on the OTC Pink sheets as “AUDA,” and following a 30-for-1 reverse stock split engineered to keep it in compliance with the NYSE, sees its shares trading at just $0.40.
Audacy on October 12 agreed to a new employment agreement with Andrew Sutor, who is now under contract through December 31, 2026. He is now entitled to an annual incentive bonus of 80% of his annual salary and has a target amount for future equity grants of $500,000.
