Emmis to repay some debt with proceeds of $90 million in asset sales

By Rebecca Melvin

New York, July 1 – Emmis Communications Corp. is using about $90 million from the sale of two radio stations to repay debt and for general corporate purposes, according to an 8-K filing with the Securities and Exchange Commission.

The company said the proceeds have resulted from a contribution and distribution agreement with Mediaco Holding Inc. and SG Broadcasting LLC, an affiliate of investment firm Standard General LT.

Under the agreement, Emmis will contribute the assets of two New York radio stations WQHT-FM and WBLS-FM in exchange for $91.5 million in cash, a $5 million note and 23.72% of the common stock of Mediaco.

Emmis will continue to provide management services to the stations under a management agreement, subject to Mediaco’s board of directors, which will consist of four directors appointed by Standard General and three directors appointed by Emmis.

Emmis will receive an annual management fee of $1.25 million, plus reimbursement of expenses directly related to the operation of Mediaco’s business.

Closing of the transaction is subject to customary closing conditions, as well as regulatory approvals.

Emmis has also entered into a consent and first amendment to its credit agreement with Wells Fargo Bank, NA, which allows Emmis to enter into the contribution agreement and removes some bank accounts from a schedule to the guaranty and security agreement.

Emmis is an Indianapolis-based diversified media company.

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