Published: Fri, March 16, 2018
Markets | By Erika Turner

IHeartMedia Says Business Will Continue During Debt Restructuring

IHeartMedia Says Business Will Continue During Debt Restructuring

The Chapter 11 bankruptcy filing of iHeartMedia represents a startling descent in fortunes for a corporation that owns more than 800 radio stations across the country, including ten of the most powerful signals in the Denver market.

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

IHeartMedia said it has enough cash to continue operating through the Chapter 11 proceedings.

Equity stakes had been a key sticking point in recent talks, with creditors demanding nearly all of iHeart and 100 percent of its healthy Clear Channel unit. "There's no reason to file for bankruptcy until you have to... but we're at that point". "Achieving a capital structure that finally matches our impressive operating business will further enhance iHeartMedia's position as America's number one audio company".

iHeart owns and operates around 850 radio stations, as well as a streaming music service and other ventures. JCDecaux SA, the world's biggest outdoor-advertising agency, also has expressed interest in buying some of Clear Channel's assets.

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iHeartMedia has been crippled by piles of debt for many years.

According to Variety, among iHeart's music industry creditors as it slips into bankruptcy are Spotify, Universal Music, Warner Music and American collecting societies BMI, ASCAP, GMR and SoundExchange.

IHeart's traditional businesses - the radio stations and the Clear Channel Outdoor billboard unit - still contribute the bulk of its revenue. In public term sheets, the equity holders offered a pre-packaged bankruptcy under which the creditors would get 89.5% of the equity.

This filing comes following a proposal February 26 by Liberty Media Corp's John Malone of buying 40% in the restructured iHeartMedia group at a price of $1.16 billion.

The bankruptcy caps a yearlong standoff with lenders and bondholders on its latest debt-cutting plan. The current attempt at an accord followed at least a dozen debt revisions over the past decade.

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