Colorado Media Newsroom
January 7th, 2024, 08:30 AM
From Radio Insight:
https://radioinsight.com/wp-content/images/2023/07/audacy-200x200.pngAudacy has reached agreement with its debt-holders on a prepackaged restructuring and filed for Chapter 11 bankruptcy protection.
As part of the restructuring, Audacy expects to drop its debt from approximately $1.9 billion down to $350 million. The company is expecting the bankruptcy court to hold a confirmation hearing in February and emerge from Chapter 11 upon FCC approval.
The company states that “operations will continue in the ordinary course throughout the restructuring process”, while trade and other unsecured creditors will not be impaired. The company’s common stock currently traded over-the-counter will continue to trade through the Chapter 11 process, but are expected to be canceled upon the completion of the restructuring.
In the bankruptcy petition, Audacy claims assets worth $2,788,943,000 and debt of $2,662,320,000. Two of its lenders have secured claims and are set to become the company’s shareholders with WSFS Bank of Wilmington DE owed $882,817,913 for Audacy’s credit facility, Deutsche Bank Trust Company Americas owed $480,846,944 for notes due in 2027 and $559,338,750 for notes due in 2029. A number of companies are listed as unsecured creditors, the largest being Katz Media Group owed $9.8 million. Others include BMI, Cox Reps, CBS Interactive, SoundExchange, iHeartMedia, Spotify, and many tech providers.
Audacy Chairman/CEO/President David Field says, “?Over the past few years, we have strategically transformed Audacy into a leading, scaled multi-platform audio content and entertainment company through our acquisition of CBS Radio and by building leading complementary positions in podcasting, audio networks, live events, digital marketing solutions and our direct-to-consumer streaming platform. While our transformation has enhanced our competitive position, the perfect storm of sustained macroeconomic challenges over the past four years facing the traditional advertising market has led to a sharp reduction of several billion dollars in cumulative radio ad spending. These market factors have severely impacted our financial condition and necessitated our balance sheet restructuring. With our scaled leadership position, our uniquely differentiated premium audio content and a robust capital structure, we believe Audacy will emerge well positioned to continue its innovation and growth in the dynamic audio business.?
Audacy, Inc., (OTC: AUDA) (the ?Company? or ?Audacy?) today announced that it entered into a restructuring support agreement (the ?RSA? or the ?Agreement?) with a supermajority of its debtholders on the terms of a comprehensive restructuring that will significantly deleverage its balance sheet and further position Audacy for long-term growth. Through the restructuring, Audacy and its debtholders will undertake a deleveraging transaction to equitize approximately $1.6 billion of funded debt, a reduction of 80% from approximately $1.9 billion to approximately $350 million. The Company does not expect any operational impact from the restructuring, and trade and other unsecured creditors will not be impaired.
?Over the past few years, we have strategically transformed Audacy into a leading, scaled multi-platform audio content and entertainment company through our acquisition of CBS Radio and by building leading complementary positions in podcasting, audio networks, live events, digital marketing solutions and our direct-to-consumer streaming platform,? said David J. Field, Chairman, President and CEO of Audacy. ?While our transformation has enhanced our competitive position, the perfect storm of sustained macroeconomic challenges over the past four years facing the traditional advertising market has led to a sharp reduction of several billion dollars in cumulative radio ad spending. These market factors have severely impacted our financial condition and necessitated our balance sheet restructuring. With our scaled leadership position, our uniquely differentiated premium audio content and a robust capital structure, we believe Audacy will emerge well positioned to continue its innovation and growth in the dynamic audio business.?
To implement the deleveraging transaction contemplated in the RSA, Audacy and certain of its subsidiaries commenced prepackaged Chapter 11 proceedings in the United States Bankruptcy Court for the Southern District of Texas (the ?Court?) on January 7, 2024. In conjunction with the Chapter 11 petitions, Audacy has filed a proposed Plan of Reorganization (the ?Plan?) that incorporates the terms of the RSA and is subject to approval by the Court. Under the terms of the RSA, a supermajority of debtholders committed to vote in favor of the Plan, which, when approved, will reduce Audacy?s funded debt from approximately $1.9*billion to approximately $350 million. Audacy?s debtholders will receive equity in reorganized Audacy. Audacy expects that the Court will hold a hearing to consider the approval of the Plan in February and to emerge from bankruptcy once regulatory approval is obtained from the Federal Communications Commission.
The restructuring will enable Audacy to continue its digital transformation and capitalize on its position as a scaled, leading multi-platform audio content and entertainment company differentiated by its exclusive, premium audio content. Audacy operates one of the country?s two scaled radio broadcasting groups, as well as one of the country?s largest podcast studios, the Audacy direct-to-consumer streaming platform and multiple audio networks. Audacy is a major event producer and a digital marketing solutions provider and is the unrivaled leader in local news and sports radio.
Audacy has filed with the Court a series of customary ?First Day Motions? to obtain Court authority for the Company to continue operating its business in the ordinary course without disruption to its advertisers, vendors, partners or employees. Audacy expects to operate normally during this restructuring process under its current leadership team.
During the Chapter 11 process, certain of Audacy?s existing lenders have committed to provide $57 million in debtor-in-possession (?DIP?) financing, comprised of $32 million of a new term loan and a $25 million upsize of the Company?s existing accounts receivables financing facility from $75 million to $100 million. Subject to the Court?s approval, the DIP financing and the Company?s cash from operations and available reserves is expected to enable Audacy to fulfill commitments to employees, advertisers, partners and vendors.
Audacy common stock will continue to trade over-the-counter under the symbol ?AUDA? through the pendency of the Chapter 11 process. The shares are expected to be canceled and receive no distribution as part of Audacy?s restructuring.
For more information on Audacy?s restructuring, including access to court documents, please visit https://dm.epiq11.com/Audacy or contact Epiq Corporate Restructuring, LLC, the Company?s claims and noticing agent, at (877) 491-3119 (toll free U.S.) / +1(503) 406-4581 (International) or audacy@epiqglobal.com. Additional information is also available at forward.audacyinc.com (https://forward.audacyinc.com/).
PJT Partners is acting as investment banker, FTI Consulting is acting as financial advisor and Latham & Watkins LLP is acting as legal counsel to Audacy.
Greenhill & Co., LLC is acting as financial advisor and Gibson, Dunn & Crutcher LLP is acting as legal counsel to the DIP financing lenders and the ad hoc group of first lien debtholders.
Evercore Group, LLC is acting as financial advisor and Akin Gump Strauss Hauer & Feld is acting as legal counsel to the ad hoc group of second lien debtholders.
more (https://radioinsight.com/headlines/263077/audacy-agrees-to-restructuring-with-debt-holders-files-for-chapter-11-bankruptcy-protection/)
https://radioinsight.com/wp-content/images/2023/07/audacy-200x200.pngAudacy has reached agreement with its debt-holders on a prepackaged restructuring and filed for Chapter 11 bankruptcy protection.
As part of the restructuring, Audacy expects to drop its debt from approximately $1.9 billion down to $350 million. The company is expecting the bankruptcy court to hold a confirmation hearing in February and emerge from Chapter 11 upon FCC approval.
The company states that “operations will continue in the ordinary course throughout the restructuring process”, while trade and other unsecured creditors will not be impaired. The company’s common stock currently traded over-the-counter will continue to trade through the Chapter 11 process, but are expected to be canceled upon the completion of the restructuring.
In the bankruptcy petition, Audacy claims assets worth $2,788,943,000 and debt of $2,662,320,000. Two of its lenders have secured claims and are set to become the company’s shareholders with WSFS Bank of Wilmington DE owed $882,817,913 for Audacy’s credit facility, Deutsche Bank Trust Company Americas owed $480,846,944 for notes due in 2027 and $559,338,750 for notes due in 2029. A number of companies are listed as unsecured creditors, the largest being Katz Media Group owed $9.8 million. Others include BMI, Cox Reps, CBS Interactive, SoundExchange, iHeartMedia, Spotify, and many tech providers.
Audacy Chairman/CEO/President David Field says, “?Over the past few years, we have strategically transformed Audacy into a leading, scaled multi-platform audio content and entertainment company through our acquisition of CBS Radio and by building leading complementary positions in podcasting, audio networks, live events, digital marketing solutions and our direct-to-consumer streaming platform. While our transformation has enhanced our competitive position, the perfect storm of sustained macroeconomic challenges over the past four years facing the traditional advertising market has led to a sharp reduction of several billion dollars in cumulative radio ad spending. These market factors have severely impacted our financial condition and necessitated our balance sheet restructuring. With our scaled leadership position, our uniquely differentiated premium audio content and a robust capital structure, we believe Audacy will emerge well positioned to continue its innovation and growth in the dynamic audio business.?
Audacy, Inc., (OTC: AUDA) (the ?Company? or ?Audacy?) today announced that it entered into a restructuring support agreement (the ?RSA? or the ?Agreement?) with a supermajority of its debtholders on the terms of a comprehensive restructuring that will significantly deleverage its balance sheet and further position Audacy for long-term growth. Through the restructuring, Audacy and its debtholders will undertake a deleveraging transaction to equitize approximately $1.6 billion of funded debt, a reduction of 80% from approximately $1.9 billion to approximately $350 million. The Company does not expect any operational impact from the restructuring, and trade and other unsecured creditors will not be impaired.
?Over the past few years, we have strategically transformed Audacy into a leading, scaled multi-platform audio content and entertainment company through our acquisition of CBS Radio and by building leading complementary positions in podcasting, audio networks, live events, digital marketing solutions and our direct-to-consumer streaming platform,? said David J. Field, Chairman, President and CEO of Audacy. ?While our transformation has enhanced our competitive position, the perfect storm of sustained macroeconomic challenges over the past four years facing the traditional advertising market has led to a sharp reduction of several billion dollars in cumulative radio ad spending. These market factors have severely impacted our financial condition and necessitated our balance sheet restructuring. With our scaled leadership position, our uniquely differentiated premium audio content and a robust capital structure, we believe Audacy will emerge well positioned to continue its innovation and growth in the dynamic audio business.?
To implement the deleveraging transaction contemplated in the RSA, Audacy and certain of its subsidiaries commenced prepackaged Chapter 11 proceedings in the United States Bankruptcy Court for the Southern District of Texas (the ?Court?) on January 7, 2024. In conjunction with the Chapter 11 petitions, Audacy has filed a proposed Plan of Reorganization (the ?Plan?) that incorporates the terms of the RSA and is subject to approval by the Court. Under the terms of the RSA, a supermajority of debtholders committed to vote in favor of the Plan, which, when approved, will reduce Audacy?s funded debt from approximately $1.9*billion to approximately $350 million. Audacy?s debtholders will receive equity in reorganized Audacy. Audacy expects that the Court will hold a hearing to consider the approval of the Plan in February and to emerge from bankruptcy once regulatory approval is obtained from the Federal Communications Commission.
The restructuring will enable Audacy to continue its digital transformation and capitalize on its position as a scaled, leading multi-platform audio content and entertainment company differentiated by its exclusive, premium audio content. Audacy operates one of the country?s two scaled radio broadcasting groups, as well as one of the country?s largest podcast studios, the Audacy direct-to-consumer streaming platform and multiple audio networks. Audacy is a major event producer and a digital marketing solutions provider and is the unrivaled leader in local news and sports radio.
Audacy has filed with the Court a series of customary ?First Day Motions? to obtain Court authority for the Company to continue operating its business in the ordinary course without disruption to its advertisers, vendors, partners or employees. Audacy expects to operate normally during this restructuring process under its current leadership team.
During the Chapter 11 process, certain of Audacy?s existing lenders have committed to provide $57 million in debtor-in-possession (?DIP?) financing, comprised of $32 million of a new term loan and a $25 million upsize of the Company?s existing accounts receivables financing facility from $75 million to $100 million. Subject to the Court?s approval, the DIP financing and the Company?s cash from operations and available reserves is expected to enable Audacy to fulfill commitments to employees, advertisers, partners and vendors.
Audacy common stock will continue to trade over-the-counter under the symbol ?AUDA? through the pendency of the Chapter 11 process. The shares are expected to be canceled and receive no distribution as part of Audacy?s restructuring.
For more information on Audacy?s restructuring, including access to court documents, please visit https://dm.epiq11.com/Audacy or contact Epiq Corporate Restructuring, LLC, the Company?s claims and noticing agent, at (877) 491-3119 (toll free U.S.) / +1(503) 406-4581 (International) or audacy@epiqglobal.com. Additional information is also available at forward.audacyinc.com (https://forward.audacyinc.com/).
PJT Partners is acting as investment banker, FTI Consulting is acting as financial advisor and Latham & Watkins LLP is acting as legal counsel to Audacy.
Greenhill & Co., LLC is acting as financial advisor and Gibson, Dunn & Crutcher LLP is acting as legal counsel to the DIP financing lenders and the ad hoc group of first lien debtholders.
Evercore Group, LLC is acting as financial advisor and Akin Gump Strauss Hauer & Feld is acting as legal counsel to the ad hoc group of second lien debtholders.
more (https://radioinsight.com/headlines/263077/audacy-agrees-to-restructuring-with-debt-holders-files-for-chapter-11-bankruptcy-protection/)