Following a number of setbacks, including layoffs and an NYSE delisting, Audacy has initiated prepackaged Chapter 11 bankruptcy proceedings.
The Philadelphia-based radio conglomerate disclosed the news in a formal release, with reports having suggested earlier in January that bankruptcy was imminent for the business.
As highlighted, 2022 had brought with it personnel reductions and disappointing financials for Audacy, before 2023 delivered (among other things) a delisting from the NYSE due to “an abnormally low selling price.”
Now, the troubled entity says it’s finalized a reorganization agreement “with a supermajority of its debtholders.” As part of the far-reaching restructuring, Audacy intends to “undertake a deleveraging transaction to equitize approximately $1.6 billion of funded debt,” ultimately bringing about a decrease of 80 percent to somewhere in the ballpark of $350 million, according to the release.
Debtholders will then “receive equity in” the revamped Audacy, per the relevant company, which expects a Texas bankruptcy court to consider the restructuring plan during February. Assuming this court signs off, the business is anticipating officially emerging from bankruptcy after scoring FCC approval sometime thereafter.
For the time being, certain “existing lenders” have put up $57 million in debtor-in-possession financing, Audacy relayed, consisting specifically of a $32 million new term loan and a $25 million bump to an “existing accounts receivables financing facility.”
As this capital suggests, the company is poised to keep on operating while the prepackaged bankruptcy proceedings progress, referring particularly to functioning “normally during this restructuring process under its current leadership team,” the release spells out.
Bigger picture, CEO David Field is touting the development as “the dawn of a new era” for Audacy, per an internally circulated memo obtained by the radio trades.
With an all-hands virtual meeting reportedly teed up for today, Field in the same memo assured team members that there’ll “be no disruption to your wages and benefits.” Moreover, “a robust balance sheet…will facilitate our future growth and performance,” the longtime Audacy head and former Goldman investment banker communicated.
Wrapping the relatively concise message, Field called on staffers to maintain their “focus on serving our customers as we transition and look forward to capitalizing on our opportunities and to better times ahead.”
In November, the self-described “multiplatform audio powerhouse” reported $299.17 million in net revenues for Q3 2023, down about six percent year over year (YoY). Additionally, Audacy identified a third-quarter net loss of $234.33 million (up roughly 66 percent YoY), fueled in part by heightened operating expenses of $580.33 million or so.