SA-based radio giant iHeartMedia files for bankruptcy

16 March, 2018, 01:03 | Author: Miranda Cannon
  • Clear Channel set to end limbo after parent iHeartMedia files for Chapter 11

iHeartMedia have reportedly agreed a restructuring deal with investors which hold over $10 billion of the debt to reduce their outstanding bills by half.

The company, owned by Thomas H. Lee Partners and Bain Capital, has been in negotiations for almost a year with its primary debtholders, led by Franklin Resources Group.

IHeartRadio operates some 850 radio stations nationwide, including Z100 in NY, seven stations in Albany, six in Binghamton, seven in Poughkeepsie, seven in Rochester, and five in Syracuse.

The broadcaster and some of its subsidiaries filed for Chapter 11 bankruptcy relief in U.S. District Court. "We're here to right-size the balance sheet".

IHeartMedia, which is based in San Antonio, had warned in 2016 that it had reached an impasse with lenders.

iHeartMedia believes that its cash on hand, together with cash generated from ongoing operations, will be sufficient to fund and support the business during the Chapter 11 proceedings.

The company owns 858 radio stations throughout 150 cities in the United States. It also produces syndicated radio programs that feature "American Idol" host Ryan Seacrest and political personalities Rush Limbaugh and Sean Hannity. The company earned $20 billion in debt from an invested buyout at now illegal loan rates in 2008 and late repayments this year put them on the brink of bankruptcy. And both companies are trying to restructure their debt.

Though iHeartMedia has a large online presence and its iHeartRadio app is popular for streaming music, it faces stiff competition from Spotify, Apple Music and other online streaming services.

iHeartMedia chief Bob Pittman also sounds optimistic, since this means the company "only" has another $10 billion in debt to worry about.

Existing shareholders would receive 1 percent of the stock in the reorganized company, according to court documents.

The two cases are unique, but both companies face similar challenges in a troubled industry. They have now confirmed they are filing for Chapter 11 bankruptcy.

Among the company's creditors is billionaire John Malone's Liberty Media, which controls satellite radio giant SiriusXM.



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