Much like Cumulus, iHeartMedia has been trying to restructure its massive debt (over $20 billion). And much like Cumulus, it hasn’t been easy. This month there was a little back and forth between iHeartMedia and some of its lenders, but the two sides still seem very far apart.
On November 22, iHeart proposed to its Term Loan Holders $7 billion in new debt giving up 87.5% equity in a recapitalized iHeart and 87.5% ownership of iHeart’s ownership in its Outdoor division. Under iHeart’s proposal, private-equity owners Bain Capital and Thomas H. Lee Partners, would retain 12.5% of the shares in both.
On November 28, the lenders countered with $5.75 billion in new debt with 95.3% equity in a recapitalized iHeart and 100% ownership in iHeart’s piece of the Outdoor company and an option to do a pre-packaged Chapter 11. Under this counter-proposal, the private-equity owners and junior bondholders get 5% of the equity in the radio business.
Stating the obvious, there is no deal and, as the company states in an SEC filing: “There can be no assurance that any agreement will be reached.” The negotiations between the two sides will continue.
iHeart has small amounts of debt due this year and next. In 2019 debt payments jump up to $8.4 billion.
Check out the two proposals HERE