With the help of a high-power lender, Audacy’s bankruptcy plan has been given the green light by a U.S. bankruptcy court. Now all the broadcaster needs is the approval of the FCC.
As part of the plan, Audacy gets to chop its massive $1.9 billion debt down by nearly 80% to $350 million. Under terms of the Chapter 11 reorganization, Audacy’s debt holders will receive an ownership stake. The group of lenders provided roughly $57 million in debtor-in-possession financing to get Audacy through the proceeding.
One of the radio and podcast company’s new stakeholders is billionaire George Soros. His Soros Fund Management recently purchased up to $400 million of debt in Audacy, according to a report in the New York Post.
Soros’s stake is equal to about 40% of the company’s senior debt. Soros will be repaid with stock in the restructured company, according to the report.
The restructuring agreement, which included what the company called a “supermajority” of its debtholders, deleveraged 80% of the company’s debt. That will leave small shareholders with mostly nothing, according to those familiar with developments. The debt-for-equity agreement will result in some large institutional creditors receiving stock in the new Audacy, according to those familiar with developments.
“Today’s announcement marks a powerful step forward for Audacy, positioning the company for an exciting future,” said David J. Field, chairman, president and CEO of Audacy. “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.”
Field says the company is now poised to “drive accelerated growth and financial performance” while capitalizing on its improved capital structure achieved by the reorganization.
“The restructuring will enable Audacy to continue its strategic digital transformation,” Field said in a prepared statement.
[Related: “Audacy to Sell Boston Real Estate for Cash“]
An Audacy spokesperson confirmed the Soros Fund investment and provided Radio World the following statement:
“The decision by our existing and new debtholders to become equity holders in Audacy represents a significant vote of confidence in our company and the future of the radio and audio business.”
The prepackaged Chapter 11 bankruptcy, filed just over six weeks ago, was confirmed in United States Bankruptcy Court for the Southern District of Texas.
U.S. Bankruptcy Judge Christopher Lopez on Tuesday wrote in his confirmation order that “the debtors are eligible for relief under section 109 of the Bankruptcy Code.”
In another motion, the judge approved the sale of the property and building that houses the studios and offices of the company’s Boston radio properties, which include WMJX(FM), WBGB(FM), WEEI(FM), WWBX(FM), WEEI(AM) and WVEI(AM).
Audacy, which owns 230 radio stations in 46 markets, also has received approval to sell the WEEI(AM) transmitter site in the Boston suburb of Needham for $3.5 million.
