Audacy has received the green light from the US Bankruptcy Court for the Southern District of Texas for all initial requests related to its Chapter 11 restructuring process, which was filed on Sunday morning, keeping the company running while the proceedings begin.
The Court’s approval enables Audacy to access a $57 million financial package, which includes a $32 million debtor-in-possession term loan and an expansion of the existing accounts receivable financing facility from $75 million to $100 million.
This funding, along with Audacy’s operational cash flow and reserves, will ensure uninterrupted payment of wages, salaries, and benefits to its employees, and to settle dues with vendors and suppliers. In a staff memo sent this past Sunday, CEO David Field pledged, “Audacy will operate normally during this process. There will be no disruption to your wages and benefits. Our current leadership team will continue to lead the Company and day-to-day roles and responsibilities will not change.”
As part of its restructuring strategy outlined in a previously announced restructuring support agreement, Audacy has secured the support of a substantial majority of its debtholders. However, more likely than not, Audacy’s remaining shareholders will pay the price. The company has voiced a warning that all shares are expected to be canceled.
Shares continue to trade over the counter for the time being.
This agreement includes a plan of reorganization that is set to significantly reduce the company’s funded debt by approximately $1.6 billion, decreasing it by 80% from around $1.9 billion to approximately $350 million. Audacy anticipates this restructuring will not affect operations, nor will it impact trade and other unsecured creditors.
