iHeartMedia has reached an agreement with the holders of more than $10 billion of its outstanding debt for a restructuring through the Chapter 11 bankruptcy process.
iHeart will continue to operate all of its properties while undergoing the restructuring that will reduce their debt by $10 billion. The restructuring will be overseen by the United States Bankruptcy Court for the Southern District of Texas, Houston Division. The company expects to have liquidity to continue operations during the bankruptcy proceedings.
Among the largest unsecured creditors owed by iHeart in trade payable or licensing fees are Nielsen who is owed $20,874,637.87, SoundExchange owed $6.4 million, Cumulus Media $5.6 million, Cox Media Group $5 million, Warner Music Group $3.9 million, CBS $2.82 million, Hubbard Broadcasting $2.3 million, and Spotify $2 million. Also unsecured is Law Debenture Trust Company’s $1.9 billion in 14% Senior Notes due in 2021 and BNY Mellon’s $309 million in 7.25% Senior Notes due in 2027 and $178 million in 6.875% Senior Notes due in 2018.
The Clear Channel Outdoor subsidiary will not be going through the bankruptcy process.
A FAQ Sheet produced by iHeart about the filing can be viewed here.
iHeartMedia, Inc. (PINK: IHRT) today announced that it has reached an agreement in principle with holders of more than $10 billion of its outstanding debt and its financial sponsors. The agreement reflects widespread support across the capital structure for a comprehensive balance sheet restructuring that will reduce iHeartMedia’s debt by more than $10 billion. iHeartMedia, America’s #1 audio company, will continue operating the business in the ordinary course as a leading global multi-platform media, entertainment and data company.
“iHeartMedia has created a highly successful operating business, generating year-over year revenue growth in each of the last 18 consecutive quarters. We have transformed a traditional broadcast radio company into a true 21st century multi-platform, data-driven, digitally-focused media and entertainment powerhouse with unparalleled reach, products and services now available on more than 200 platforms, and the iHeartRadio master brand that ties together our almost 850 radio stations, our digital platform, our live events, and our 129 million social followers,” said Bob Pittman, Chairman and Chief Executive Officer. “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. Achieving a capital structure that finally matches our impressive operating business will further enhance iHeartMedia’s position as America’s #1 audio company.”
To implement the balance sheet restructuring contemplated by the agreement in principle, iHeartMedia and certain of its subsidiaries, including iHeartCommunications, Inc., have filed voluntary petitions for relief under Chapter 11 of the U.S. Bankruptcy Code in the United States Bankruptcy Court for the Southern District of Texas, Houston Division. Clear Channel Outdoor Holdings, Inc. and its subsidiaries did not commence Chapter 11 proceedings.
The Company has filed with the Bankruptcy Court a series of customary motions seeking to maintain business-as-usual operations and uphold its commitments to its valued employees and other stakeholders during the process. These “first day” motions, which the Company expects to be granted in short order, will help facilitate a smooth transition into Chapter 11.
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.
For additional information about iHeartMedia’s restructuring, including access to Court filings and other documents, please visit https://cases.primeclerk.com/iHeartMedia, call the Company’s Restructuring Information Hotline at (877) 756-7779 (for toll-free domestic calls) and (347) 505-7142 (for tolled international calls), or email firstname.lastname@example.org.
Kirkland & Ellis LLP is serving as legal counsel to iHeartMedia, Moelis & Company is serving as the Company’s investment banker, and Alvarez & Marsal is serving as the Company’s financial advisor.