Audacy on Thursday received the approval of a federal judge to extend several debt agreements that were set to expire next week, keeping the company from financial harm as it works to wrap up its bankruptcy process.
The decision — while expected — was no doubt a relief for Audacy, which aims to exit Chapter 11 in the third quarter of this year. The ruling by U.S. Bankruptcy Judge Christopher Lopez of the U.S Bankruptcy Court for the Southern District of Texas in Houston lets the company hit pause on some of its financial obligations and provides protections from default or anything else that might prevent the company from gaining access to new capital.
Audacy’s move was necessary because it has been waiting for six months for the Federal Communications Commission to approve its post-bankruptcy restructuring deal.
The decision will “preserve the status quo” and extends Audacy’s new forbearance period until at least Sept. 30.
The finance agreements in question cover loans and revolving credit that Audacy is using to operate during the restructuring process. If the court failed to agree to the new expiration date, Audacy would have been at risk of default — and all money collected by Audacy would automatically be applied to repayment of its loans.
Under the court-approved plan, Audacy’s business will remain intact and it will see $1.6 billion in debt wiped out. It also allows for Audacy to emerge from the process with access to new loans and financing.
Audacy had good reason to think the August expiration date for its financial agreements would have been enough time, considering how quickly things had been moving. It filed for Chapter 11 on Jan. 7, and a month later the court confirmed the plan that Audacy and its debtholders had drafted. Then on March 15, the company delivered its application to the FCC.
One small hurdle was finding a buyer for a Greenville-Spartanburg, SC market station where Audacy owns one more grandfathered FM than would be permitted under current rules. But that took little time too. Norsan Media emerged as a buyer for WSPA-FM, paying $700,000 for a station it is now operating under a marketing agreement. The former AC “Magic 106.3” is now airing the Spanish regional Mexican “La Raza” network.
Comments