iHeartCommunications and its lenders have agreed to a 72-hour extension as they continue talks to restructure the company’s $20 Billion in debt. Lenders and iHeart have signed a Forbearance Agreement, which means lenders will not exercise their right to pursue a default, at least through Wednesday, on iHeart’s missed $106 million interest payment, as the two sides continue to try to hammer out a deal.
Also, the agreement allows iHeart to not make interest payments as the company continues discussions with its stakeholders on a restructuring. iHeart has been working on a proposed draft restructuring support agreement and related proposed draft restructuring term sheet with advisors to groups of the company’s noteholders, lenders, and equity holders.
This agreement expires on March 7.
No agreement has been reached but this would indicate that the two sides are getting closer on the details to restructure iHeart’s $20 billion in debt.
iheart’s latest proposal would give holders of secured loans, who are owed nearly $13 billion, $5.6 billion in new debt and 93.25 percent of the equity in a reorganized iHeartMedia. They would also receive 89.5 of Clear Channel Outdoor. Holders of unsecured notes, who are owed about $2.2 billion, would receive $200 million in new debt and 5 percent of the equity in a reorganized iHeart. The proposal would have allowed current equity holders to receive 1.75 percent of the equity in a reorganized iHeartMedia.
