Report: iHeartMedia Investors Watching For Signs Of Bankruptcy

Investors in iHeartMedia Inc., which has lost money in 28 of the past 29 quarters, won’t be looking for profits when the company reports third-quarter earnings Wednesday.

They’ll be watching for any signs of a looming bankruptcy, reports mysanantonio.com.

“It’s not a broken business model. It’s a broken balance sheet,” said Philip Brendel, a Bloomberg Intelligence credit analyst.

The company’s been struggling since March to renegotiate with investors its crushing debt load, $20.4 billion at the end of June. The parties have been at a standstill for months over the company’s pre-bankruptcy offer to exchange $14.6 billion in loans and bonds that come due over the next few years.

“The bond and term loan holders fully understand what is going on. I don’t think (another quarterly loss) will rattle them,” added Seth Crystall, Debtwire senior credit analyst.

The offer’s deadline has been extended numerous times, and the terms have changed, according to iHeartMedia.

On Wednesday, iHeartMedia will report third-quarter revenues of about $1.56 billion, down slightly from the $1.59 billion in the second quarter, Crystall estimated. Cash flow for the company will fall slightly to $452 million from $461 million in the second quarter, he added.

The company’s debt and interest payments as well as $75 million in capital expenses ate through its estimated $580 million in cash flow, Crystall said. “The company will burn cash,” he said.

In the fourth quarter, iHeartMedia’s cash flow should turn positive because holiday season advertising will boost revenue by an extra $50 million to $75 million, he explained.

Nevertheless, Brendel said, the company faces a potential technical default in the first quarter of 2018. The company warned last spring that it might not be able to make interest payments beginning in early 2018.

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