A series of motions filed by Audacy Inc. on Sunday, when it announced it would be restructuring under Chapter 11 federal bankruptcy protection, has, as expected, been approved by a Houston court.
Now, it could be simply be a confirmation hearing when the company founded as Entercom by Joseph Field emerges from debtor-in-possession status, as the U.S. Bankruptcy Court for the Southern District of Texas seeks to reduce any backlog triggered by the sudden October 2023 resignation of Judge David Jones on ethics concerns.
Bankruptcy Petition # 24-90004 saw flurry of docket activity, as RBR+TVBR reported Monday, with the case assigned to Judge Christopher M. López. He gave his approval to every “first day” motion related to Audacy’s prepackaged Chapter 11 proceedings.
Importantly, the motions grant Audacy access to $57 million in financing from some of its existing lenders.
This financing includes a new $32 million debtor-in-possession term loan.
It also includes a $25 million “upsize” of Audacy’s existing $75 million accounts receivables financing facility, pushing it to $100 million.
The “DIP” financing, the upsize of the accounts receivables financing facility and the company’s cash from operations and available reserves are expected to enable Audacy to fulfill commitments to employees, advertisers, partners and vendors.
The Houston federal bankruptcy court also authorized Audacy to continue to pay employee wages, salaries and benefits without interruption and to pay vendors and suppliers.
As of 11am Central on Tuesday, there were no new items added to the court docket by Audacy through its legal counsel in Texas.
As RBR+TVBR first shared on Sunday (1/7), Audacy entered into a restructuring support agreement with a “supermajority” of its debtholders that is designed to equitize approximately $1.6 billion of funded debt, shrinking it by 80% to approximately $350 million.
Audacy says it does not expect any operational impact from the restructuring, and trade and other unsecured creditors will not be impaired. However, it noted that all shareholders stand to lose 100% of their investment, lest they sell all of their shares ahead of the company’s emergence from bankruptcy protection.
That proclamation torpedoed Audacy’s shares on Monday, sending AUD to an all-time low of $0.1058.
As of Noon Eastern on Tuesday, there was no trading activity across the morning of January 9 for Audacy stock.
