If Audacy’s reorganization is going to clear FCC approval, its final hurdle, it will need permission to exceed the foreign ownership limit of 25%.
The company’s Chapter 11 proceeding wiped out about $1.6 billion in debt and quickly worked its way through bankruptcy court. Now Audacy is requesting a “temporary and limited waiver” on foreign ownership from the FCC, the company wrote in a filing with the commission last week.
The document does not make clear how much over the 25% cap Audacy might go, but it worries that the issue might “significantly delay the emergence of Audacy from bankruptcy, which would impose substantial burdens on the company,” so it’s asking for a temporary waiver.
The filing states that the FCC has a history of handling broadcaster bankruptcy issues quickly. Audacy hopes the FCC will grant a “temporary and limited waiver.”
The company plans to issue 100 million shares of Audacy stock. The two largest shareholders of the new publicly traded company will be Laurel Tree Opportunities and MBX Commercial Finance.
Since the existing stock will be canceled, substantially all of the reorganized company’s voting stock will be held by the new shareholders.
Investment company Laurel Tree is expected to hold about 57% of the Class A common stock, about 41 million shares, with three seats on the new Audacy board. The company is partially backed by billionaire George Soros; it also has an indirect ownership interest in Latino Media Network.
Audacy’s second largest shareholder will be MBX Commercial Finance, which will hold approximately 9.5% of the new stock. MBX is controlled by Manoj Bhargava, the founder of 5-Hour Energy.
It’s not clear from the filing how many board seats MBX be guaranteed. Bhargava also has ties to Renew Group Private Ltd., which holds a 10% stake in Cumulus Media and hopes to eventually acquire a 20% stake in the radio broadcaster. Cumulus recently adopted measures to try to prevent Bhargava from doing so.
Audacy owns 235 stations in 48 radio markets. It expects to divest one FM station in Greenville-Spartanburg, S.C., to remain compliant with market ownership caps following its emergence, according to its filing. Audacy says it will spin the station into a divestiture trust.
The company says it is also over the station limit in Kansas City. However, one of its nine stations is on the expanded portion of the AM band; according to the filing, Audacy will remain in compliance subject to the continuation of the existing expanded AM band waiver.
Other details emerging in the filing with the FCC: Audacy CEO David Field will have a seat on the board so long as he remains employed by the company. And at least one other board seat will serve at the pleasure of the 46 institutional investors, which include JP Morgan, Morgan Stanley and Goldman Sachs.
Audacy filed its reorganization on Jan. 7 and received confirmation of its plan from the bankruptcy court on Feb. 20.
[Related: Read about steps Audacy is taking ahead of emerging from the bankruptcy phase.[
