iHeart Media Debt Restructure Updates

A couple of updates on Clear Channel Outdoor’s parent company iHeart Media as they move towards a restructuring of their $20 billion in debt.

Radio+Television Business Report had an article noting that iHeart Media was victorious in a San Antonio appeals court ruling. The issue was whether a 2015 equity transfer of shares in Clear Channel Outdoor Holdings to a separate unrestricted unit, Broader Media LLC, had triggered an event of default, in violation of the terms of iHeart’s priority guarantee notes.  The creditors, representing $3 billion in debt, challenged the action, claiming that iHeart received no compensation for the shares, which was part of the collateral package securing their debt.  The Texas court said no.

The New York Post and the Wall Street Journal, both have related articles on a potential iHeart Media debt restructure proposal.  The Post, on August 10th, reported that iHeart Media’s biggest single creditor, Franklin Resources in working on a restructuring plan that could keep iHeart from declaring bankruptcy.

Franklin’s restructuring plan would keep iHeart’s best radio stations in tact, and also would likely leave in place iHeart Chairman and CEO Bob Pittman who is generally liked by creditors, the source said.

In exchange, however, sources said Franklin may ask for creditors to get a majority stake in the business. Also, it might ask iHeart to issue new debt, perhaps as much as $1 billion, that would need to be paid first before equity holders could take any distributions or dividends.

The WSJ reported late on October 12th that iHeart Media met with representatives of Franklin Resources and one other creditor group.

Insiders Take – Could be some progress being made, but iHeart has indicated if any proposals are not reasonable, they look at bankruptcy as an option.  Control of Clear Channel Outdoor will also be in play.

 

 


Paid Advertisement

 

 

Print Friendly, PDF & Email

Comments are closed.