On Saturday, some lenders and noteholders received a term sheet for a restructuring from Liberty Media. The proposal includes an investment of $1.159 billion from Liberty and has iHeart filing for Chapter 11 bankruptcy. Here’s what a portion of the term sheet says…
“On account of $1.159 billion new cash investment, Liberty and Sirius, collectively, will receive 40% of the New Common Shares. 20% of the New Common Shares would be held by Sirius and 20% of the New Common Shares would be held by Liberty.”
iHeart has been attempting to restructure over $20 billion in debt. On February 1 the company decided to skip a $106 million interest payment that was due today (Monday) on its 2021 outstanding Senior Notes. That set off a 30-day grace period to make the interest payment before an event of default is triggered. Cumulus made the same type of move and filed for bankruptcy before the grace period ended.
In the iHeart proposed plan from Liberty, “Outdoor would be spun off in a taxable transaction.”
The plan calls for iHeart and Liberty entering into a restructuring agreement (bankruptcy filing) in March. A new iHeart board would consist of nine members, with Liberty having the right to appoint four directors, while creditors would designate four and the CEO would be a director. The term sheet says “the plan is to be consummated no later than December 21, 2018.” The plan calls for new secured exit financing of $5.250 billion.
No comment from iHeartMedia as of yet. A term sheet does not mean a deal has been done.
Read the entire term sheet HERE