Audacy bankruptcy could occur by month's end

[MarkW]

Payment grace periods of the sort described in this article are generally 30 days.

If payment is not made, forbearance is not granted, or an out of court restructure is not implemented by the end of the payment grace period, Audacy will have no choice but to file BK.

Audacy Gains One Debt Payment Grace Period Extension; Enters Two More

Audacy has gained an additional 30 day extension to extend the grace period before it would default on its 6.75%

radioinsight.com

 

[RadioGuy1864]

Payment grace periods of the sort described in this article are generally 30 days.

If payment is not made, forbearance is not granted, or an out of court restructure is not implemented by the end of the payment grace period, Audacy will have no choice but to file BK.

Audacy Gains One Debt Payment Grace Period Extension; Enters Two More

Audacy has gained an additional 30 day extension to extend the grace period before it would default on its 6.75%

radioinsight.com

The majority of people on this board were thinking BK was not going to be considered for a couple years. Maybe Audacy sees some window to get a re-negotiation with this group of lenders sooner rather than later. They certainly have the 18 million in cash available to make the payment.

 

[MarkW]

If they enter court, I think they will do so with a partial pre-pack or full pre-pack in hand.

 

[Kent]

If payment is not made, forbearance is not granted, or an out of court restructure is not implemented by the end of the payment grace period, Audacy will have no choice but to file BK.

I had the same thought. Bankruptcy might not be a given, but that's exactly what Cumulus did in the run up to its bankruptcy.

 

[Kelly A]

Payment grace periods of the sort described in this article are generally 30 days.

I don't know where you get the impression from this article there is bankruptcy involved. It just says they're renegotiating their debt with lenders. Click bait intended?

 

[CTListener]

I don't know where you get the impression from this article there is bankruptcy involved. It just says they're renegotiating their debt with lenders. Click bait intended?

Wishful thinking is more likely, given most of this board's non-radio-insider posters' antipathy toward Audacy.

 

[MarkW]

I don't know where you get the impression from this article there is bankruptcy involved. It just says they're renegotiating their debt with lenders. Click bait intended?

I've represented creditor interests as lender in multiple corporate bankruptcies. My comment is based on my professional knowledge of how the process works including the period leading up to bankruptcy.

You seem like a smart fella. You think the company is actually going to come right out and say "yeah, we're probably going to file BK in a month" before having all of its ducks in a row? Give me a break.

Any payment made now to unsecured debt holders would be at risk of being disgorged because of preference period regulations under Chapter 11.

 

[Kelly A]

I've represented creditor interests as lender in multiple corporate bankruptcies. My comment is based on my professional knowledge of how the process works.

You seem like a smart fella. You think the company is actually going to come right out and say "yeah, we're probably going to file BK in a month" before having all of its ducks in a row? Give me a break.

Then why in the subject line did you include it?

 

[MarkW]

The company's actions are a tell tale sign a filing is very possible within 30 days, that's why.

Is it a certainty? No.

I suggest reading some financial news reports over the next day or two on this matter. You'll see I'm hardly alone in my view.

 

[TheBigA]

The thing about it is that it's not as though they don't have the $18 million. They have more than $18 million in cash on hand.

Here's a link to a similar story from 2018 and iHeart skipping a payment:

iHeart Skips $106M Loan Payment As Debt Negotiations Continue.

In a major development in its efforts to improve the company’s capital structure, the board of directors of iHeartCommunications decided not to make a $106 million interest payment due Feb.

www.insideradio.com

It took a couple of months, and here's what happened:

iHeart Reaches Agreements With Stakeholders, Files Chapter 11.

iHeartMedia has struck an agreement in principle with holders of more than $10 billion of its debt. The company says the agreement reflects “widespread support” across its capital structure for

www.insideradio.com

 

[MarkW]

What is their quarterly unlevered cash burn rate?

That $18 million figure needs context.

Non performance of unsecured debt payments inside the preference period window is standard practice in these situations.

(Edit: kudos to BigA for posting the iHM reports pertaining to a similar decision they made before entering Chapter 11. Their case was not a true pre-pack, however. Their case was actually rather messy. They were in BK court for twelve months )

 

[Kelly A]

The company's actions are a tell tale sign a filing is very possible within 30 days, that's why.

Is it a certainty? No.

I suggest reading some financial news reports over the next day or two on this matter. You'll see I'm hardly alone in my view.

I get it, you have some bone to pick with Audacy. No need to read between those lines. Sorry to harsh your buzz; but just because they're trying to renegotiate debt, doesn't mean they are somehow circling the drain. If they made the $18M payment as scheduled, they would have given up the negotiation ground.
As BigA pointed out; all indications are that Audacy has enough cash on hand to make that payment.

 

[TheBigA]

Here's how Cumulus handled it's situation. It began in a similar way:

To Rework Debt, Cumulus Puts All Options On The Table.

After failing to make a previously scheduled debt repayment, Cumulus is using the grace period built into the 2011 loan agreement to continue talks with its creditor groups on efforts

www.insideradio.com

 

[MarkW]

I get it, you have some bone to pick with Audacy. No need to read between those lines. Sorry to harsh your buzz; but just because they're trying to renegotiate debt, doesn't mean they are somehow circling the drain. If they made the $18M payment as scheduled, they would have given up the negotiation ground.
As BigA pointed out; all indications are that Audacy has enough cash on hand to make that payment.

You are such a condescending troll.

No one is suggesting the company will cease to exist. I am suggesting there is a decent likelihood they will use Chapter 11 to reorganize, just as a number of other broadcasting companies have done.

It is unclear to me why you find that suggestion so offensive.

 

[TheBigA]

As BigA pointed out; all indications are that Audacy has enough cash on hand to make that payment.

It's a way to get attention from the lenders and say "We're serious." Perhaps they have another plan in mind. We don't know.

 

[Kelly A]

You are such a condescending troll.

Ah, resorting to name-calling now eh?

No one is suggesting the company will cease to exist. I am suggesting there is a decent likelihood they will use Chapter 11 to reorganize, just as a number of other broadcasting companies have done.

And time will tell whether you're right. Are you denying that you just made the off-the-cuff assumption right in the subject line, with nothing in what you posted actually indicating bankruptcy is imminent?

It is unclear to me why you find that suggestion so offensive.

I find your promoting struggles with the financial situation at Audacy disturbing. What, did you get canned from an Audacy property?

 

[MarkW]

So I'm not allowed to talk about any publicly traded broadcaster's financial struggles here?

Who the hell made you the traffic cop?

My subject line is perfectly reasonable given the situation at hand. Nowhere did I suggest they are out of money or headed for liquidation. What I am suggesting is a reorganization in Chapter 11 to strengthen the balance sheet is quite possible.

I do think there is a better than even money chance they'll file Chapter 11 within 30 days. I may be right or wrong on the timing.

I see no convincing reason as of yet why Audacy will be able to avoid a Chapter 11. Cumulus and iHM both had to go thru an 11.

 

[TheBigA]

I see no convincing reason as of yet why Audacy will be able to avoid a Chapter 11. Cumulus and iHM both had to go thru an 11.

However, the CEOs of Cumulus and iHeart didn't own 30% of their companies. This is a very different situation. A company goes into Chap 11 when it seeks protection, and it's willing to turn the company over to the court. I don't think that's where Field is.

 

[davideduardo]

This is an interesting and topical subject, and I don't want to close it due to differences of opinion. Please avoid the "personal" aspect of different opinions

 

[davideduardo]

However, the CEOs of Cumulus and iHeart didn't own 30% of their companies. This is a very different situation. A company goes into Chap 11 when it seeks protection, and it's willing to turn the company over to the court. I don't think that's where Field is.

Good point, and one where a partial exchange of debt for partial equity and a refinancing of the remaining debt becomes the first option for the Fields.