THE VIRGINIAN-PILOT
Copyright (c) 1994, Landmark Communications, Inc.
DATE: Tuesday, September 27, 1994 TAG: 9409280647
SECTION: BUSINESS PAGE: D1 EDITION: FINAL
SOURCE: BY DAVE MAYFIELD, STAFF WRITER
LENGTH: Medium: 62 lines
The parent company of Hampton Roads' top-rated radio station, WOWI-FM, has sold 80 percent of its common stock to a New York investment fund for $26 million.
US Radio Inc. of Philadelphia said Monday that the stock sale to a fund controlled by The Blackstone Group will give it greater access to capital needed to expand.
US Radio, with 14 radio stations, is already one of the nation's largest minority-controlled broadcasting companies.
Besides WOWI, which is better known by its nickname 103 JAMZ, US Radio owns WSVY-AM in Norfolk and sells ads for WSVY-FM. It manages WMXN-FM in Norfolk and plans to buy that station, also known as Mix 105, by January.
The Blackstone partnership that bought into US Radio is the largest of that group's, with about $1.3 billion of capital. It was able to use that capital to obtain a $72 million senior line of credit for US Radio from Chemical Securities Inc. of New York.
Even after retiring the radio company's debt from a previous reorganization, US Radio will have $19 million remaining from the credit line to help with future station purchases, said Michael Driscoll, US Radio's chief financial officer.
Ragan A. Henry, the Harvard-educated lawyer who founded and chairs
US Radio, will continue to control the company because the remaining stock owned by two partnerships that he heads will have extra voting power, Driscoll said.
The stock-sale agreement with Blackstone gives the Henry partnerships the ability to increase their stake in US Radio from 20 percent to as much as 35 percent, Driscoll noted. He said the better the company's financial performance, the higher the Henry-led partnerships' stake will become.
Last March, US Radio had registered for a public offering of 74 percent of its stock. It hoped to raise $40 million through that sale. The market for initial public offerings soon soured, however, and the stock sale was shelved. Driscoll said Henry then began shopping for private capital sources.
That led it to Blackstone.
Besides Norfolk, US Radio's holdings include stations in Memphis, Tenn.; El Paso, Texas; Reading, Pa.; and Raleigh.
WOWI, the Norfolk station with an urban music format, is one of the company's most valuable. It topped local stations' Arbitron ratings in the spring with a 10.1 audience share. ILLUSTRATION: Graphic
US RADIO, LOCALLY
US Radio Inc. of Philadelphia owns:
WOWI-FM, Hampton Roads' top-rated station.
WSVY-AM in Norfolk
and stations in: Memphis, Tenn.; El Paso, Texas; Reading, Pa.;
and Raleigh.
US Radio also:
Sells ads for WSVY-FM in Hampton Roads.
Manages WMXN-FM, a local station it plans to buy in January.
by CNB