UPDATE 3/13/18 8:00 AM: The bankruptcy and reorganization of iHeartMedia has been postponed for another 24 hours, according to an SEC filing overnight. Creditors have agreed to a forbearance agreement granting the nation's largest radio broadcast group until 11:59PM CT today to reach terms for a reorganization.
As with the previous extensions, the lenders have agreed not to trigger an event of default from the company’s Feb. 1 decision to skip a $106 million interest payment on its 14% senior notes due 2021.The agreement extends an earlier forbearance period that would have expired March 12 at 11:59 pm.
As part of the terms, iHeart has agreed not to default on any of its credit agreements, other than those covered in the forbearance agreement, which pertains to a May 2008 credit agreement.
The company and its lenders have been trying to hammer out the final details of a voluntary reorganization under Chapter 11 of the U.S. Bankruptcy Code. However, the company cautioned “no agreement has been reached” and “discussions remain ongoing.”
UPDATE 3/13/18 3:30 AM: iHeartMedia's deadline has come and gone. There's no word on where things stand now. iHM admitted in a Monday SEC filing that is has been unable to come to terms with its $20 billion in creditors despite weeks of negotiations. Stay tuned...
Monday evening posting....
By midnight tonight, perhaps even before, we could well learn the fate of iHeartMedia, and it’s a hugely important story, and not just for radio.
According to Forbes, a deal now in the works would restructure the company, transferring control of iHeart from Bain Capital and Thomas H. Lee Partners, two venture capital firms, to the company’s debt holders, led by Franklin Advisers, while reducing the company’s crippling debt load.
How the company is restructured, if a deal can even be reached, will play out across all media.
In the best of all worlds, the right sort of deal could well lead to a renaissance of radio, revitalizing the industry, which has suffered deep collateral damage from iHeart’s many struggles following a disastrous 2008 leveraged buyout that left the company with over $20 billion in debt.
The right sort of deal would keep the company together.
But that’s the best hope, says Forbes
It could easily go the other way. The talks could collapse, as have all past talks, forcing the company into bankruptcy.
That’s a real possibility. As of midday today, the talks appeared stalled.
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