Cumulus Media Seeks Foreign Ownership Ruling From FCC

RADIO ONLINE | Thursday, May 23, 2019

Cumulus Media

Cumulus Media has filed a petition with the FCC seeking a declaratory ruling requesting that the agency find it would serve the public interest to permit up to a 100 percent aggregate foreign investment (voting and equity) in Cumulus Media Inc., which is a Delaware corporation. Cumulus filed the petition in connection with the recent joint reorganization of the company and its debtor affiliates.

In order to emerge from Chapter 11 bankruptcy at the earliest practicable time, the reorganization plan provided for a mechanism under which special warrants were issued to holders of claims which did not certify that they were 100 percent U.S. owned and controlled entities. Cumulus now requests approval to permit up to a 100 percent aggregate foreign investment to enable holders of warrants and non-voting stock to convert or exercise these instruments in exchange for voting stock and allow non-U.S. persons or entities to hold up to 100 percent of its voting stock and capital stock generally in the future.

Specifically, Cumulus explains that upon grant of the petition, the special warrants would be automatically exchanged, and foreign ownership of Cumulus immediately following such exchanges would then be approximately 34 percent on a voting basis and 31 percent on an equity basis. Notwithstanding that the foreign ownership which would result from exercise of the special warrants is expected to be much less than 100 percent, Cumulus states that it is requesting a ruling that would permit non-U.S. persons or entities to hold up to and including 100 percent of its voting stock and 100 percent of its capital stock generally.

Cumulus believes that elimination of the overall limitation on foreign ownership of its shares will enhance the market liquidity of its stock and "provide the company with the greatest degree of flexibility in accessing foreign investment capital."

Cumulus asserts that grant of the petition is entirely consistent with the public interest. In support, Cumulus asserts that grant of the petition is consistent with the reorganization plan, which has enabled Cumulus to emerge from bankruptcy in a stronger financial condition, and which, in turn, will enable Cumulus to raise capital, enhance its programming, better serve the public, and compete with non-FCC regulated entities on a more level playing field.

Cumulus also maintains that grant of the petition aligns with U.S. foreign trade policy and the U.S. government's desire to "promote inbound foreign investment" and encourage reciprocity with U.S. trading partners.

The FCC says the petition is acceptable for filing and it may require Cumulus to submit additional documents or statements of fact that in its judgment may be necessary so as to make it "more definite and certain." Interested parties must file comments no later than June 20.