The New York Post’s Josh Kosman is reporting that a senior iHeart lender told him Wednesday that he would prefer iHeartMedia goes bankrupt than take the company’s latest restructuring offer. As we reported yesterday, iHeart filed an 8K with the SEC that said it was considering ending talks with debt holders. The filing showed iHeart was looking for an interest rate cut of 75 basis points and a one year extension. The creditor told the Post his debt is now trading at 73 cents on the dollar and he could get 90 cents in a bankruptcy.
“The proposal they are making is a non-starter to me,” he told the Post, regarding the interest rate cut request and one year extension. The creditor, who spoke on the condition of anonymity, told the Post he would rather have a reasonable offer on the table than see the company collapse into bankruptcy — but he would opt for Chapter 11 over the current offer.
The company has consistently said “We continue to evaluate various opportunities to strengthen our capital structure for the benefit of our stakeholders, and we remain focused on positioning iHeartMedia for long-term growth.” iHeart has also consistently stated that the strong performance of its operating business provides the company with the flexibility to manage its capital structure in a prudent manner. And in May iHeart won a court case against bondholders who were objecting to iHeart transferring shares of Clear Channel stock to a subsidiary called Broader Media.
What Did iHeart Propose To The Debt Holders?
iHeart May End Talks With Debt Holders
It’s unfortunate that Bob Pittman and Clear Channel/iHeart totally misfocused on priorities the last few years. Millions of dollars and resources were put on digital and streaming, when more money and focus should have been on the radio stations, and not dumbing the stations down with voice tracking and intolerable commercial loads that drove listened away. Pittman forgot that radio is about LOCAL programming. It’s not about an app!