The United States Bankruptcy Court for the Southern District of Texas has approved Audacy’s Plan of Reorganization allowing it to exit Chapter 11 bankruptcy proceedings upon approval from the FCC.
The approved plan will see Audacy cut its debt from approximately $1.9 billion to approximately $350 million. All unsecured creditors will be paid.
Audacy Chairman/CEO/President David Field stated, “Today’s announcement marks a powerful step forward for Audacy, positioning the Company for an exciting future. 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. I also want to express my gratitude to our team, who continue their outstanding work to serve our listeners and customers with excellence and fulfill our commitments without missing a beat.
The new Board of Directors of Audacy will include Field or any successor as CEO, a Chairman and two other members selected by Soros Fund Management as majority shareholder (and an additional member should it increase its holdings to 50.1% of the company), two others nominated by the other First Lien debt-holders, and the Second Lien debt-holders will choose one member as long as they hold 80% of the outstanding common stock.
Other clauses include Soros Fund Management as majority share holder having protective provisions preventing the board without its approval that include changing the size of the board, hire or fire the CEO, enter into an acquisition or incur debt above a redacted level, cause bankruptcy or insolvency, and increase any line in the annual budget by more than 5 percent of the prior year. Those terms are in-place until a sale of the company or a new IPO of its stock.
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.
