George Soros' buyout of approximately $415 million of Audacy's debt would make his Soros Fund Management the largest stakeholder of the second-largest radio company in the U.S. when it emerges from chapter 11 reorganization. According to bankruptcy court filings, Soros has assumed anywhere from 40% to more than half of the estimated $745 million of senior debt, out of the $1.9 billion owed by Audacy. Other large debtholders include hedge fund HG Vora Capital Management, SI Capital Commercial Finance, and PGIM. Over the past several weeks, Soros scooped up the debt at nearly 50 cents on the dollar from Vora, according to the New York Post.
“The decision by our existing and new debtholders to become equity holders in Audacy represents a significant vote of confidence in our company and the future of the radio and audio business,” Audacy said in a statement.
The debt buyout represents the latest act in the liberal billionaire's media investments. While Soros was part of a group to bail out Vice Media last year, the Audacy deal isn't his first land grab in the audio business. In addition to taking a minority stake in podcast company Crooked Media, Soros Fund Management was also one of several investors in Latino Media Network, which purchased 18 radio stations in 10 major markets – including New York, Los Angeles, and Miami – from TelevisaUnivision a year ago.
Audacy, which owns more than 220 radio stations, filed for bankruptcy in January to restructure its balance sheet and slash its total debt to $350 million. Along with the Chapter 11 petitions, Audacy has filed a proposed Plan of Reorganization that includes the terms of the restructuring agreement and is subject to court approval.
Under Audacy’s current plan, existing shareholders are expected to be wiped out, while high-ranking creditors like Soros would be repaid with stock in the restructured company. The plan requires bankruptcy court approval, with a hearing set for Feb. 20.
Meanwhile, a pair of creditors have filed objections to the confirmation of Audacy’s prepackaged bankruptcy plan. Oracle America has filed a “rights reservation” asserting that before Audacy can assume the computer and software provider’s contract, it must either pay the amount it owes the company or provide assurance of future payment. Oracle America estimates Audacy owes it just over $12.9 million.
And 5670 Wilshire Owner, the landlord for Audacy’s Los Angeles studios, has filed a limited objection to the reorganization plan. The landlord is seeking just over $39,000 in back rent and $5,000 in attorney fees as a condition for the assumption of its lease. It also wants to see the reorganization plan modified to allow for its setoff and recoupment rights.
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