iHeartMedia filed a new document with the SEC on Thursday that detailed some of the negotiations going on between the company and a group of bondholders. We learned two things. In the ongoing negotiations regarding iHeart’s debt, lenders proposed an out-of-court exchange offer with a stapled pre-packaged Chapter 11 plan of reorganization. iHeart came back with a counter-proposal this passed Tuesday. No deal has been reached and The Wall Street Journal is reporting that the two sides still appear to be far apart.
The Journal is reporting that a key difference between iHeart’s proposal and the proposal made by a group of bondholders, led by Franklin Resources, is that the Franklin-led group wants the company to file a prepackaged bankruptcy plan. Under that plan, senior bondholders and term loan lenders would get a huge chunk of shares in both radio and Clear Channel Outdoor. Obviously, iHeart wants to avoid bankruptcy and countered with a proposal to restructure $15.5 billion of debt out of court, with iHeartMedia’s junior bondholders and private equity owners Bain Capital and Thomas H. Lee Partners retaining over 50% of equity in iHeartMedia, and 30% of the equity iHeartMedia currently owns in Clear Channel. Under the company’s proposal, its senior bondholders and term loan lenders, including the Franklin-led group, would get the rest of the equity in iHeartMedia and Clear Channel.
The company has over $20 billion in debt. Over $600 million comes due next year.
The only people I feel bad for is the employees. iHeart has such a high turn over rate, it’s insane. Wage freezes, hiring freezes, and horrible management. Yet, they find the money to spend on amazing office spaces and reward the upper crust with bonuses. Bob, Rich and the rest of the groupies will ride the gravy train until the fat lady sings. I hope whatever the outcome that’s execs get wiped out and the company is taken private with shot corporate credit. Bring down that behemoth from 850+ stations to 300 and focus on the quality not quantity! iHeart makes radio look bad and it’s not the case. Spotify would just need to jump into concert events to seal iHeart’s tomb. What is iHeart holding on to? Aging DJ’s who’s shows are sydicated? Ahem…Seacrest. Even he’s moved on! Live with Kelly and Ryan? Anywho best of luck to all involved.
“I hope whatever the outcome that’s execs get wiped out and the company is taken private with shot corporate credit.”
FYI the company is already private. That’s what caused all the debt.
“Spotify would just need to jump into concert events to seal iHeart’s tomb.”
Except Spotify doesn’t have any money either. They’ve been trying to do an IPO, and the market isn’t right, as evidenced by the killing Pandora took this year.
It’s always comical when we read that a corporate debtor like IHeart is trying to “negotiate” or “re-structure” with their creditors. In English, iHeart wants to STIFF their creditors for some of the debt. How about PAYING YOUR BILLS ??????? Just like you expect your advertisers to pay you!!! And does anyone know how many millions and millions of dollars that Bob Pittman and his minions at Iheart will collect in golden parachutes, when they declare bankruptcy?
TTBOMK they haven’t missed a single debt payment. This is a common practice. Millions of people do it everyday with credit card debt, home mortgages, and even the IRS.
You are 100% wrong. Tax obligations are NOT deductible in bankruptcy!…Who are you– a lackey for Pittman and Iheart?…Wht are you defending them?????
Where did I say tax obligations are deductible? I didn’t. I said that millions of people negotiate their debts with lenders. That includes tax debt. I’m not defending anyone, just stating the facts.
Again, you’re twisting the truth. Tax obligations are NOT negotiable or dischargeable in bankruptcy. And the point is, that Bob Pittman and his top henchman are going to get millions of dollars in golden parachutes, while the employees get hurt and in bankkruptcy, their creditors are going to get stiffed for billions of dollars. And you’re defending that. Wow.
“Tax obligations are NOT negotiable or dischargeable in bankruptcy.”
Again, you’re misreading my post. Try doing it slowly. iHeart isn’t negotiating its tax obligations, and I never said they were. What I was saying is lots of people (as in individuals, not radio corporations) negotiate their debt. That includes credit card debt, home mortgage, and income tax. Do you understand now? And iHeart is not in bankruptcy anyway, so your point is moot. Try paying attention sometime.
“their creditors are going to get stiffed for billions of dollars”
Don’t feel bad for their creditors. To borrow a phrase from Trump, they knew what they signed up for. No one forced them to do this. And they’ve been collecting principle & interest on $20Bil for almost ten years. At some point, the creditors can walk away and call it a wash. We’ll see how they decide to play it.