Audio and podcast giant Audacy has begun the process of healing its financial wounds, after gaining approcal from the US Bankruptcy Court for the Southern District of Texas for its reorganization plan, allowing it to emerge from from Chapter 11 bankruptcy.
Audacy, burdened by a staggering $1.9 billion debt, filed for Chapter 11 bankruptcy protection in Texas on January 7. The pre-packaged reorganization plan, agreed upon by a majority of creditors, aims to significantly slash that debt by over 80%, converting it into equity.
Under the approved plan, Audacy will shed $1.65 billion of debt, leaving existing shareholders with nothing, according to a court filing. High-ranking creditors, including Soros Fund Management, will receive ownership shares in the restructured company in exchange for their outstanding debt.
Bloomberg recently reported that the fund chaired by hedge fund billionaire and philanthropist George Soros acquired more than $400 million of Audacy’s highest-ranking debt. This move grants Soros Fund the largest stake in Audacy, adding the company to the fund’s growing media portfolio.
Soros Fund was previously involved in the acquisitions of Vice Media (which recently shut down its website to focus on becoming a studio that services other media brands) and podcast platform Crooked Media.
The future of Audacy under Soros’s influence remains to be seen. Some industry experts view this as a positive step, believing his financial backing can stabilize the company and fuel its digital transformation. Others express concerns about potential editorial influence, given Soros’s political and philanthropic leanings.
“Today’s announcement marks a powerful step forward for Audacy, positioning the company for an exciting future,” David J. Field, Chairman, President and CEO of Audacy, said in a statement.
“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. We aim to drive accelerated growth and financial performance, capitalizing on our scaled, leadership position, our uniquely differentiated premium audio content and the robust capital structure that we will have upon emergence.”
“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.”
David J. Field, Audacy
The plan (as outlined here) also involves securing $57 million in debtor-in-possession financing, comprised of a new term loan of $32 million and a $25 million upsize of the company’s existing accounts receivables financing facility, from $75 million to $100 million.
However, the journey isn’t over yet. Audacy still requires approval from the Federal Communications Commission (FCC) before officially exiting Chapter 11. This approval hinges on the FCC’s assessment of the reorganization plan’s impact on the radio industry and public interest.
Audacy boasts a number of assets, with over 230 stations and media brands across 48 markets, including iconic names like KROQ in Los Angeles and WFAN in New York. The company is touted as the second-largest radio broadcaster by revenue in the US after iHeartMedia.
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