Audacy has filed an emergency motion asking a bankruptcy judge to approve the sale of several parcels of land. One includes a building housing its Boston radio studios and offices. Another is the tower site for one of its AM stations.
If approved, the sales would deliver a cash infusion for the financially troubled media company, though it would be a small fraction of its current debt.
Audacy is in the midst of leveraging a restructuring plan to chop its massive $1.9 billion debt down by nearly 80% to $350 million. Its prepackaged Chapter 11 bankruptcy proceedings, as the company termed them, were launched earlier this year in the United States Bankruptcy Court for the Southern District of Texas.
As part of the voluntary filing, Audacy’s debtholders would receive an ownership stake.
The company’s Boston radio stations include FM stations WMJX, WBGB, WEEI and WWBX as well as AM stations WEEI and WVEI. They are based in a building in Boston’s Brighton neighborhood, at 83 Leo M. Birmingham Parkway.
In the motion, Audacy asks a bankruptcy judge to expedite the sale of that property for up to $18.1 million to 83 Leo Property Owner LLC.
The proposed buyer will pay $11.1 million at closing with an additional payment of up to another $7 million depending on the market value of the property, according to the court motion by Audacy. Closing is expected to be no later than March 6.
“The Debtors believe that the current offer from 83 Leo is the best offer that they will receive because 83 Leo is best positioned to close on the Property without any contingencies,” Audacy stated in the motion.
The company says it would then pay a base rent equal to $40,000 per month to the new owner for at least two years after the closing date.
Audacy owns 230 radio stations in 46 markets. It believes the eventual relocation of its Boston operations to a smaller building with updated technology would result in notable savings compared to the costs of operating and maintaining the current property.
In a second motion, Audacy said it has reached agreement with American Tower Systems Corp. to sell a two-acre property at 1555 Central Avenue in Needham, Mass., for $3.5 million. That is the site of the WEEI(AM) transmission facilities. The sale is expected to close by Feb. 28.
Details in the court motion indicate that Audacy receives a special easement “in and to the land underlying three guyed towers, one brick building and one garage on the property.”
Audacy would continue to pay its utilities and maintenance expenses for its owned towers and access road to the easement areas. The company also agrees to reimburse American Tower Systems for 15% of the real property taxes assessed on the property, according to the filing.
The company appears to be in sell-mode. Earlier this year it sold the prime property housing its Phoenix radio stations. The building at 840 N. Central Avenue sold for $10.5 million, according to the Phoenix Business Journal.
The possibility that Audacy would sell some of its real estate had been raised by business observers, as we’ve reported.
In addition, Audacy recently entered into a settlement agreement, already approved by the bankruptcy court, to sell its interest in BMI for $25 million. The company’s stake in the performance rights organization goes back decades to a time when multiple radio and television owners invested in BMI to collect royalties for songwriters.
Audacy was de-listed from the New York Stock Exchange in November. The company’s stock price closed at approximately 5 cents on Friday. It trades as AUDAQ on the OTC Markets.
