INNOVATE Plans 75% Broadcasting Sale with $105M Refinancing and $75M Equity Commitment
VATE•INNOVATE Corp’s broadcasting unit secured a $105M refinancing loan from CONX Merger Sub to repay existing 8.50% and 11.45% notes and fund equity repurchases. Under a merger plan, CONX will acquire 75% of Broadcasting, with INNOVATE retaining 25% and an option to repurchase up to 15%, alongside a $75M equity commitment.
1. Refinancing Transaction
Broadcasting closed on a $105M loan with CONX Merger Sub to fully satisfy its 8.50% and 11.45% notes, fund equity repurchases from noteholders and cover related transaction costs, with the loan maturing May 29, 2027 and set to be extinguished upon merger closing.
2. Merger Agreement
INNOVATE and CONX Merger Sub entered a definitive merger agreement under which Merger Sub will merge into Broadcasting, leaving CONX with a 75% stake and INNOVATE with 25% through HC2 Holdco, while the new loan and accrued interest will be canceled as merger consideration.
3. Equity Commitments and Options
CONX has committed up to $75M of equity funding post-closing, subject to purchase price adjustments, and INNOVATE holds an 18-month option to acquire up to 15% additional stake, while a CONX affiliate may exercise a two-year option to hold up to 80.1% of Broadcasting.
4. Strategic Rationale
The transactions address INNOVATE’s capital structure priorities, maintaining exposure to the largest Class A and LPTV portfolio of 260 stations across over 40 states, and reinforce the company’s focus on stakeholder value and portfolio optimization.
