As the radio industry grapples with declining advertising revenue, Audacy is preparing to enter negotiations with financial creditors in an effort to restructure its debt, say insiders familiar with the situation. In preparation for the confidential discussions concerning Audacy’s $1.9 billion debt, attorneys representing two different groups of creditors have signed nondisclosure agreements.
The initial report came from the Wall Street Journal on Tuesday afternoon. While this is not a confirmation of a restructuring or that one is guaranteed, the exploratory action has certainly shown that the move could be possible.
Gibson Dunn & Crutcher have been hired by a group of senior lenders, while Akin Gump Strauss Hauer & Feld are representing a group of second-lien bondholders. Meanwhile, Audacy has enlisted the assistance of restructuring adviser PJT Partners, and Latham & Watkins law firm.
A statement from an Audacy spokesperson to Radio Ink‘s parent company Streamline Publishing said, “As we have previously stated we intended to do, we have initiated discussions with our lenders to refinance our debt and optimize our balance sheet to position Audacy for long-term growth as we continue to invest in our people, platform, technology, content and growth initiatives.”
The Philadelphia-based company has seen its revenue decline and net losses widen due to lower ad spending, which is in response to broader macroeconomic pressures such as lower consumer spending expectations.
In a tense Q1 earnings call in May, Audacy revealed that its revenue forecasts for the upcoming year suggest it may have difficulty meeting its debt obligations. This uncertainty, the company admitted, casts doubt on its ability to continue operations.
That same month, the company was delisted from the NYSE for non-compliance over stock value when shares dropped under $.10 apiece. Last week, the company completed a 1-for-30 reverse stock split in an effort to be re-added.
See my previous comment on these guys. Them and many like them are all about the deal, the merger, the purchase. But truth be known they shouldn’t run gas stations no less hundreds of radio stations.
Aquire, fire, reorganize, repeat. Shameful legacy they are leaving behind.