The FCC granted with conditions Cumulus Media’s remedial petition for declaratory ruling to seek specific approval for certain named foreign investors to hold more than 5% of the equity and/or voting interests in Cumulus and advance approval for those foreign investors to increase their equity and/or voting interests in Cumulus up to any non-controlling amount not to exceed 14.99%.

The filing follows Renew Group Private Ltd. increasing its stake in Cumulus from 5.15% to 10.01% in January and stating its intent to acquire 20% of the company. That move was the impetus for Cumulus adopting a Poison Pill Maneuver to prevent any person or group becoming the holder of 15% or more of their Class A Common Shares without the prior approval of the Board to ward off a hostile takeover of the company.

Cumulus was granted permission from the FCC in 2020 to exceed the 25% limit on foreign investment. That ruling required Cumulus obtain specific approval for each investor that would hold more than 5% of the company within 30 days of knowing it was no longer in compliance. Cumulus complied filing in February that Renew Group Private Ltd. had acquired a 9.8% equity stake and 10.01% of voting interest.

Pending action on a forthcoming public comment period regarding the increased stake, the FCC has required conditions that would suspend all voting rights of more than 5% of Cumulus’s outstanding voting stock by Renew Group Private Limited; IR Investments, LP; the IR Charitable Trust; and Indu Rawat, or any of their affiliates.

The conditions state:

No Renew Investor shall have the right to do any of the following, and Cumulus shall not allow any Renew Investor to do any of the following, until and unless the Commission releases a declaratory ruling granting specific approval for the Renew Investors to hold, directly and/or indirectly, more than 5% of the equity and/or voting interests in Cumulus:

• Designate, appoint, nominate, or serve as a member of the board of directors of Cumulus;
• Attend any meeting of the board of directors of Cumulus;
• Receive any non-public materials from Cumulus, including any non-public materials distributed to the board of directors of Cumulus;
• Have any role in or communicate with Cumulus concerning the day-to-day management or operations of Cumulus’s radio stations; or
• Have any role in or veto right with respect to a decision to buy or sell a radio station.

No employee, agent, or affiliate of the Renew Investors shall be an officer, director, employee, or consultant of Cumulus (including subsidiaries and affiliates of Cumulus) until and unless the Commission releases a declaratory ruling granting specific approval for the Renew Investors to hold, directly and/or indirectly, more than 5% of the equity and/or voting interests in Cumulus. Cumulus shall not permit any employee, agent, or affiliate of the Renew Investors to be an officer, director, employee, or consultant of Cumulus (including subsidiaries and affiliates of Cumulus) until and unless the Commission releases a declaratory ruling granting specific approval for the Cumulus Investors to hold, directly and/or indirectly, more than 5% of the equity and/or voting interests in Cumulus.

Cumulus must ensure that any and all dividends and/or distributions payable to the Renew Investors are placed in escrow and that no such dividend or distribution is made to the Renew Investors until and unless the Commission releases a declaratory ruling granting specific approval for the Renew Investors to hold, directly and/or indirectly, more than 5% of the equity and/or voting interests in Cumulus.

Within seven days of the date of grant of the assignment application, Cumulus shall submit a declaration to the Chief, Audio Division, Media Bureau, confirming that Cumulus is in compliance with each of the preceding conditions and that Cumulus will exercise its rights under its organizational documents to remain in compliance with each of the preceding conditions until and unless the Commission releases a declaratory ruling granting specific approval for the Renew Investors to hold, directly and/or indirectly, more than 5% of the equity and/or voting interests in Cumulus.

Pursuant to section 1.5004(f)(3)(iii) of the Commission’s rules, if the petition is denied, Cumulus must come into compliance no later than 30 days following the Commission’s decision, unless the Commission determines under such rule that immediate remedial action is required.