Report: iHM's Biggest Creditor Softens Stance

The biggest creditor of iHeartMedia is close to blinking in its nearly six-month stare-down with America’s largest owner of radio stations, The NYPost is reporting.

Mutual fund Franklin Resources is working with investment bank PJT Partners on a restructuring plan that could save iHM from bankruptcy — although it may ask for more cash guarantees and possibly a controlling equity stake in return, a source close to the situation tells The Post.

Franklin is preparing a proposal to present to fellow creditors and iHM as early as next week, a source close to the situation said.

Franklin, which owns $2.3 billion of iHeart’s $20 billion in debt, has until now taken the hard stance that it could get a better recovery in bankruptcy than by accepting a restructuring.

But Franklin’s adviser, PJT Partners, has recommended not pushing iHeart into bankruptcy, which would likely result in a sale of the most profitable of its 855 stations.

In addition to keeping iHeart’s best stations, Franklin’s restructuring plan also would likely leave in place iHeart Chairman and CEO Bob Pittman, the former MTV honcho who is generally liked by creditors, the source said.

In exchange, however, sources said Franklin may ask for creditors to get a majority stake in the business. Also, it might ask iHeart to issue new debt, perhaps as much as $1 billion, that would need to be paid first before equity holders could take any distributions or dividends, the source said.

There remains a possibility if Franklin’s ask is too stiff, iHeart will simply reject the offer and go bankrupt.

On Thursday, iHeart said it priced a $150 million bond offering that pays 8.75 percent interest so it can stay current with debt payments over the next several months.

“I don’t think iHeart would be raising these bonds unless they thought they were going to reach a restructuring deal,” the source said.