On Monday, iHeart announced some good news regarding its bankruptcy proceeding. The company says it has received overwhelming creditor support for its plan to reorganize. iHeart filed for chapter 11 protection back in March and is expected to emerge in 2019 with 50% less debt, knocking off $10 billion.
Voting results indicate that every class of creditors entitled to vote has voted to approve the plan. More than 90% of the votes cast by creditors and shareholders who participated in the vote approved the plan. A company press release hints that, due to this vote, there should be no problem getting the plan approved.
iHeart stated in the press release that the “voting results indicate strong support of iHeartMedia’s plan, which achieves a value-maximizing restructuring that comprehensively addresses the company’s funded debt obligations and positions iHeartMedia for continued growth and long-term success. The plan will reduce iHeartMedia’s funded debt by approximately $10.3 billion—to $5.75 billion—and result in the separation of iHeartMedia’s radio and outdoor advertising businesses. With the support of its creditors and the expected confirmation of the plan, iHeartMedia expects to complete its restructuring process and exit Chapter 11 in early 2019.”
Final voting results will be filed with the United States Bankruptcy Court for the Southern District of Texas, Houston Division, prior to the hearing to confirm the plan.
What I really want for Christmas are shares in a radio company that is still 10 billion dollars in debt and hasn’t figured out how to run an effective and profitable medium.
Lucky they are that the competition hasn’t figured it out either. 🙂
Not sure I would want equity in a company that is 10 billion dollars in debt. Then again what’s the dividend ratio? N/A you say? But then again just checked, as of a minute ago the stock was up 1.6 percent at .47.7 cents a share. That said, might be the only way the creditors recoup their investment. Kudos to all the radio stations that grind it out everyday competing again the likes of I Heart that pay ALL their bills
FYI The current stock doesn’t include the radio stations or the streaming business. That stock will go to zero when the bankruptcy is finalized. Then they will issue new stock for the reorganized company. The creditors will negotiate with companies that want a stake in the new company. Those new companies include Liberty Media and Apple. But everyone who works for iHeart gets paid from the privately owned company. I haven’t heard any paychecks or rent checks that have bounced.
Yes, isn’t it great news that so many companies and individuals who entered in good faith into business with iHeart will now get stiffed for millions of dollars owed to them, and the iHeart “leadership” responsible will still continue to enjoy their personal power and huge salaries? It’s a great day!
Maybe you don’t understand that the creditors get equity in the company. That equity makes them the owners. The owners can fire or replace the leadership if they feel they’re irresponsible or doing the company harm. So far, they’ve chosen not to do that, although they’ve put them on a results-based payment plan.
don’t necessarily disagree. however that’s the way of business today & current bankruptcy laws. want change? talk to your congresspersons, and good luck with that. you know who’s pocket they’re in…
It would appear the creditors believe iHeart is worth more alive than broken up and sold off to pay the debt…….what does THAT say about the Radio Business’s long-term outlook??
It says to me that doing business as usual in the RED is OK in the radio industry. Wow, iHeart only owes $10 billion! Let’s jump for joy! You watch what happens. Since 50% of their debt was forgiven (at creditors expense), they will find another way to open up another large line of credit and spend spend spend! It’s hopeless, regardless of due process!
they’ve made two HUGE purchases while in Chapter 11, it’s astounding! $55mm for a podcast company and an undisclosed amount for programmatic ad player Jelli.