Audacy, a prominent radio company, faces imminent bankruptcy, as reported by The Wall Street Journal. Struggling under a burdensome $2 billion debt, Audacy grapples with a severe decline in advertising revenue. The company is on the verge of filing for bankruptcy within the next few weeks due to its financial predicament.
To address this crisis, Audacy has engaged in negotiations with its senior lenders, establishing a prepackaged bankruptcy plan. This plan is expected to secure necessary financing for the impending Chapter 11 proceedings, resulting in the senior lenders assuming ownership of the company after the restructuring process.
The company’s financial struggles primarily stem from diminishing revenue and widening net losses, significantly linked to a substantial downturn in advertising spending. Earlier concerns about Audacy’s ability to meet debt obligations based on its revenue forecasts for 2024 have now escalated. In October, Audacy missed interest payments on senior loans, leading to negotiations for a grace period with lenders to intensify restructuring efforts.
Securing a 12th amendment to its credit agreement in December provided Audacy an additional 68 days to reach an agreement without defaulting on $18.9 million in looming loans. However, challenges loom as $926.4 million of debt is set to mature this year. Failure to reach consensus with lenders could potentially force Audacy into bankruptcy court protection.
Originally founded as Entercom Communications in 1968, Audacy underwent a significant transformation in 2017 through a merger with CBS Radio. The rebranding as Audacy in 2021 marked its evolution, now overseeing 235 radio stations in 48 markets alongside streaming services via its mobile app.
