In a Tuesday afternoon press release, iHeartMedia announced the company had decided not to repay $57.1 million in senior notes due Thursday, held by Clear Channel Holdings. While $192.9 million of legacy notes held by other holders will be paid in full, the $57.1 million balance held by affiliate CCH will remain outstanding. Here’s what CEO Bob Pittman and CFO Richard Bressler told iHeart employees about this decision
In a memo to employees, Pittman and Bressler said what was announced Tuesday should not disrupt the day-to-day operations of the company at all. “This process is very complex, and there are many players — and no matter what we do at each step, there will be some debtholders who think we’re making good moves and others who think we are not. We believe we are taking the right actions to strengthen our company for the future and protect what we have built, even though some of those who disagree with our strategy will certainly create noise or confusion in the press. We greatly appreciate your patience as we work through this important process, and we apologize in advance for any noise you may hear as the process unfolds. We think we’ll all be happy with the eventual outcome.”
As you know, our company was a leveraged buyout, or LBO, back in 2008 — and, as many LBOs do, has a high debt to equity ratio. We started taking steps this year to address our company’s capital structure – which is where the debt sits, and is distinct from our operating business, i.e., the day-to-day operations of our company — and bring our debt to equity ratio to a more optimal level. We wanted to let you know that today you will likely be seeing some media coverage about our latest steps toward that goal.
The staff memo goes on to say that the work the employees have been doing over the last several years has enabled iHeartMedia to do what few companies have ever done – transform from a traditional media company into a 21st century multi-platform media and entertainment leader with incredible assets across broadcast radio, digital, outdoor, mobile, social, data and live events. “We are truly excited about the company and we want to thank you for everything we’ve built together. Let’s keep the momentum going.”
Company spokesperson Wendy Goldberg says, “Over the past five years, we have transformed iHeartMedia into a leading 21st century media and entertainment company – one that includes some of the industry’s most successful platforms across broadcast radio, digital, outdoor, mobile, social, and live events. The strength in our operating business gives us the ability to deal with our capital structure, and we are focused on taking additional steps in order to support the long-term growth of this unique multi-platform company.”
Read the full press release HERE
in any sane business model these weasels would have been gone long ago. They keep coming up with glittery stuff to fool shareholders and suck in more investors in one of he best con jobs I have ever seen. Gotta give them credit for that! When it falls down and goes boom I am going to feel sorry for the early investors, but those who got in later will know why the promised payouts were so big…Ponzi scheme.
The fat lady is not singing “BANKRUPTCY!”…yet… but she’s warming up real loud!! And Bobby Pittman and his VP cronies are getting ready to pull those golden parachute$$, while the little guys get stiffed!! Welcome to America!!!