Billionaire George Soros, through his investment vehicle Soros Fund Management, is poised to become the top shareholder in Audacy Inc., the Philadelphia-based firm that's the second-largest radio operator in the U.S., after snapping up a hefty chunk of the company's debt, The Detroit News reports. Audacy, which owns a string of Detroit radio stations, such as WWJ-AM 950 and 97.1 the Ticket, filed for Chapter 11 bankruptcy in January due to a towering $1.9 billion debt load.
In a dash for equity, Soros Fund Management is sitting on approximately $415 million of Audacy's first-lien debt, giving Soros a prime seat at the table when the company exits bankruptcy, which Deadline mentions could happen following a court hearing scheduled for Feb. 20. The move positions SFM to swap its secured debt for a controlling share, a maneuver that's slated to dramatically shift the company's balance of power.
Audacy, formerly known as Entercom, is the proud owner of over 220 radio stations and has found itself in the throes of financial restructuring, planning to reduce its debt to a more manageable $350 million, as per InsideRadio. This comes after Soros recently grabbed a stake in Vice Media to pull it from the brink of bankruptcy, depicting a recurring theme of investment in distressed media assets.
Amidst this financial drama, a couple of creditors have raised their concerns, where Oracle America claims Audacy hasn't cleared a $12.9 million bill, and 5670 Wilshire Owner, which houses Audacy's Los Angeles studios, wants over $39,000 in back rent, these objections have been filed against Audacy's prepackaged bankruptcy plan, which predicts existing shareholders getting zilch while top-tier creditors like Soros could likely cash in with stock in the revamped company, this scenario underscores the harsh realities accompanying corporate financial downturns and the opportunistic maneuvers of eagle-eyed investors like Soros.
Audacy's voyage into bankruptcy has garnered a positive spin from the company itself, which believes the convergence of old and new debtholders into equity partners reflects a "significant vote of confidence in our company and the future of the radio and audio business," as they put it—in statements obtained by Deadline,—the company is adamant about continuing its strategic efforts and delivering content and services to its audience and partners throughout the restructuring process.
