iHeartMedia have reportedly agreed a restructuring deal with investors which hold over $10 billion of the debt to reduce their outstanding bills by half.
The Chapter 11 bankruptcy filing of iHeartMedia represents a startling descent in fortunes for a corporation that owns more than 800 radio stations across the country, including ten of the most powerful signals in the Denver market.
These creditors also will receive iHeartMedia's 89.5 percent stake in Clear Channel Outdoor Holdings Inc, the world's largest billboard company, which did not file for bankruptcy.
Although the radio company's mega-bucks debt pile is mainly the result of the 2008 acquisition, it has - like most media firms - been struggling to deal with the big shift to digital.More news: Carlos Hyde to sign three-year deal with Browns
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"What they've done to try to stay afloat is financial engineering", says Seth Crystall, an analyst at Debtwire.
About 265 million people in the USA still tune in to iHeart's stations at least once a month, but newer media such as Spotify's streaming service and SiriusXM's satellite broadcasts have cut into the audience and put a damper on sales. Performance rights organizations ASCAP and BMI are each owed slightly over $1.4 million while Global Music Rights is looking at a $2 million debt.
The restructuring comes just days after the 2018 iHeartRadio Music Awards.
Thomas H. Lee Partners and Bain Capital LLC control 68% of the iHeartMedia voting stock shows a recent annual report.
The reorganization calls for holders of the company's term loan and other debt to get new debt, equity or warrants in a new company.
IHeartMedia skipped a $106 million interest payment on February 1, triggering a 30-day grace period during which the company has tried to hammer out a deal with it bondholders. That grace period was then extended multiple times until news of the move into bankruptcy was announced overnight.