The company is circulating an offer to involved creditors to invest $1.159B for a 40-% stake in a re-organized iHM. According to reports 20% of the restructured company's common shares would be held by Liberty and 20% would be held by SiriusXM, a Liberty subsidiary.
The total investment would be offset by any senior communications claims held by Liberty, at its discretion.
Clear Channel Outdoor would be "spun off in a taxable transaction," and the Investment Agreement would include a "no-shop" obligation of the debtors and would require the debtors to cooperate in getting the Bankruptcy Court to approve the deal.
Also under the plan Liberty would get four seats on the new Board of Directors, with creditors getting four as well. No "poison pill" provisions are included in the proposal.
iHM, the biggest U.S. radio broadcaster, is teetering ever closer to a default on its $20 billion debt load. The company skipped a $106 million interest payment due Feb. 1 on its 14 percent notes, kicking off a 30-day countdown to an official default.
Creditors expect the company to file for bankruptcy by the end of the grace period, and are negotiating with each other and the San Antonio, Texas-based company to reach a pre-arranged plan before time runs out, according to the people.
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