Indianapolis-based Emmis Communications Corp. on Tuesday announced it is selling KPWR-FM “Power 106” in Los Angeles to an affiliate of Meruelo Group for $82.75 million.
Emmis shares rose 31 percent Tuesday afternoon, to $3.40 each, after it announced the sale.
The sale is pending Federal Communications Commission and other regulatory approvals.
KPWR, a hip-hop station, has long been at or near the top in the L.A. market in terms of audience size, according to Nielsen Media Research data.
“Power 106 has been part of the Emmis family for more than 32 years, so this day is bittersweet, but I am confident that the station and our team are in good hands,” Emmis Chairman and CEO Jeff Smulyan said in a written statement. “The Meruelo Group will be great owners of this historic brand, and take it to even greater heights.”
The Meruelo Group, whose Meruelo Media affiliate acquired Los Angeles TV station KWHY-TV Channel 22 in 2011 and radio station KDAY-FM in 2014, is the largest minority-owned media group in California.
Under pressure from its lenders, Indianapolis-based Emmis last month said it planned to sell $80 million worth of its radio station assets by July 2018.
Emmis recently renegotiated its debt agreement with JPMorgan Chase Bank and Bank of New York Mellon, the company disclosed last month in a public filing. Under terms of that agreement, Emmis was required to sell at least $80 million worth of assets and use those proceeds to pay down its debt.
The sale will go toward reducing Emmis’ $152.2 million in credit facility debt. Emmis also has $68.8 million in nonrecourse debt, for total indebtedness of $221 million as of Feb. 28.
Emmis owns 16 FM and three AM radio stations in New York; Los Angeles; St. Louis; Austin, Texas; and Indianapolis. The company also developed and licenses the cloud-based broadcasting software platform TagStation and is the developer of the smartphone app NextRadio. Emmis also owns Indianapolis Monthly magazine.