1:30 PM, Mar 15, 2018 — Radio station owner iHeartMedia, the parent of advertising company Clear Channel Outdoor (CCO), filed for Chapter 11 bankruptcy protection, reaching a deal with creditors to cut its $20 billion debt in half as it restructures its balance sheet.
San Antonio, Texas-based iHeartMedia said it has filed with the US Bankruptcy Court in Houston a series of motions to maintain business-as-usual operations. It also said that Clear Channel didn’t file for bankruptcy protection.
“The agreement we announced today is a significant accomplishment, as it allows us to definitively address the more than $20 billion in debt that has burdened our capital structure,” said Bob Pittman, the company’s chairman and chief executive officer. “Achieving a capital structure that finally matches our impressive operating business will further enhance iHeartMedia’s position as America’s #1 audio company.”
Reuters reported that iHeartMedia’s creditors will receive the company’s 89.5% stake in Clear Channel, which it said was the largest billboard company in the world.
“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 said.
The bankruptcy filing comes after Pink Sheets-listed iHeart said it wouldn’t make a cash interest payment of $106 million that was due Feb. 1 and said it would utilize a 30-day grace period to make payments on the 14% senior unsecured notes due 2021.
Also last month, Liberty Media Corporation (FWONA) submitted a term sheet for restructuring iHeartMedia unit iHeartCommunications, proposing to buy a 40% stake for $1.16 billion.