Audacy files for bankruptcy| Trending Viral hub

AudacityThe troubled radio and audio streaming company said Sunday that it filed plans to reorganize under Chapter 11 bankruptcy to reduce its debt.

Audacy is the second largest radio station in the US (after iHeartMedia) with 235 owned radio stations in 48 markets. The company’s stations include Los Angeles’ KROQ, KNX and KRTH; New York sports radio WFAN and 1010 WINS; V-103 (WVEE) and 92.9 The Game (WZGC) from Atlanta; Newsradio 780 WBBM and 670 The Score (WSCR) from Chicago; Alice (KLLC) and KCBS of San Francisco; and KISW of Seattle.

Through the restructuring, Audacy expects to eliminate about $1.6 billion of funded debt (an 80% reduction from about $1.9 billion) to $350 million. The Philadelphia-based company said it filed prepackaged Chapter 11 proceedings in the U.S. Bankruptcy Court for the Southern District of Texas on Jan. 7, 2024. Audacy debtholders will receive shares in the reorganized company. Audacy expects the court to hold a hearing to consider approving the bankruptcy plan in February and emerge from bankruptcy once regulatory approval is obtained from the FCC.

David Field, president and CEO of Audacy, cited a “perfect storm” of macroeconomic challenges for the bankruptcy reorganization.

“While our transformation has improved 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 multi-billion dollar reduction in cumulative radio advertising spending.” Field said in a statement. “These market factors have seriously affected our financial condition and have required the restructuring of our balance sheet. With our leadership position at scale, our exceptionally differentiated premium audio content and a strong capital structure, we believe Audacy will emerge well positioned to continue its innovation and growth in the dynamic audio business.”

Audacy said it expects to “continue to operate its business in the normal course without interruptions to its advertisers, suppliers, partners or employees. “Audacy expects to operate normally during this restructuring process under its current leadership team.”

Founded in 1968 as Entercom Communications, the company changed its name to Audacy in 2021. In 2017, Entercom acquired CBS Radio, which owned 117 stations nationwide, and provided it with the Radio.com digital audio platform. In 2019, the company purchased podcast companies Cadence13 and Pineapple Street Studios.

During the Chapter 11 process, certain of Audacy’s existing lenders have committed to provide $57 million in debtor-in-possession financing, comprised of $32 million of a new term loan and a $25 million increase in debtor-in-possession financing facility. company’s existing accounts receivable of $75 million. to $100 million, the company said. Audacy said that, pending bankruptcy court approval of its bankruptcy plan, debtor-in-possession financing and cash from the company’s operations and available reserves, it expects to have the capital to “meet the commitments with employees, advertisers, partners and suppliers.

Audacy shares were delisted from the New York Stock Exchange in November 2023. The company’s shares will continue to trade over-the-counter under the symbol “AUDA” during the Chapter 11 reorganization process. be canceled and not receive distribution as part of Audacy’s restructuring, the company said.

PJT Partners is acting as investment banker, FTI Consulting is acting as financial advisor and Latham & Watkins is acting as legal advisor to Audacy. Greenhill & Co. is acting as financial advisor and Gibson, Dunn & Crutcher is acting as legal advisor to the debtor-in-possession’s financial lenders and the ad hoc group of first lien debtholders. Evercore Group is acting as financial advisor and Akin Gump Strauss Hauer & Feld is acting as legal advisor to the ad hoc group of second-degree debt holders.

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