Emmis Communications Corp. has received a much-needed extension to repay a mountain of debt the Indianapolis-based media company owes one of its largest lenders.

Emmis announced late Tuesday that it had reached an agreement with Canyon Capital Advisors LLC in Los Angeles to extend the maturity date on $182.9 million in senior bank debt for an additional year—from November 2013 to November 2014.

The amount Emmis owes Canyon Capital is part of the company’s overall debt total of $329 million.

In a letter to employees, Emmis CEO Jeff Smulyan said the move gives the company additional flexibility to operate more effectively.

“It means that Emmis is on more solid footing than we were just a few days ago,” he said. “We need you to continue focusing on working hard and bringing our business back. We’ve seen remarkable trends in the last few months, and I know we can continue the momentum.”

The agreement that Emmis reached with Canyon Capital also allows the company to waive a requirement that its audits be certified for fiscal 2011 and 2012.  

Wall Street initially reacted favorably to the agreement, as the price of Emmis shares early Wednesday morning increased 2 cents, to $1.06 each.

The large amount of debt continues to weigh on Emmis following Smulyan’s attempt last year to take the company private.

Emmis announced in May the $90 million buyout bid by JS Acquisition LLC, a private company formed by Smulyan to complete the purchase. A group of preferred shareholders blocked the deal, and Smulyan’s financial backer, New York-based Alden Global Capital, backed out of an “agreement in principle” to sweeten the terms for the preferred shareholders.

The failed attempt to take Emmis private has resulted in three lawsuits, the latest filed earlier this month by Emmis in a federal court in New York.

Meanwhile, to raise cash, Emmis already has a deal pending to sell one of its Los Angeles stations to Mexico’s Grupo Radio Centro for $110 million. It also has quietly floated the idea of selling WLUP-FM and WKQX-FM in Chicago and WRXP-FM in New York—stations “where we believe the sale value could exceed the prospects for cash-flow generation as part of our portfolio,” Emmis said in a 2010 regulatory filing.

The company has yet to release earnings for its latest fiscal year, which ended Feb. 28.  In the fiscal year ended Feb. 28, 2010, Emmis reported radio revenue of $178 million—down 27 percent from the $244 million reported two years earlier.

In the fiscal third quarter ended Nov. 30, Emmis lost $1.6 million on revenue of $66.5 million.

Founded by Smulyan in 1981, Emmis owns 23 radio stations in the United States and publishes regional magazines in several cities, including Indianapolis Monthly.