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iHeartMedia (formerly Clear Channel Communications) is preparing to file for bankruptcy as early as today, according to several sources. The company owns more than 850 radio stations in the United States.

Founded by Lowry Mays and B.J. “Red” McCombs in 1972, the business was later sold to Bain Capital, LLC and Thomas H. Lee Partners in 2008. Since the buyout, the company has struggled to pay it’s more than $20 billion of acquired debt.

A new proposal filed with the Securities and Exchange Commission today would reduce the debt from 20.6 billion to under $5.8 billion under a Chapter 11 bankruptcy reorganization plan. Clear Channel Outdoor Holdings, an iHeart subsidiary, would be separated – leaving stockholders with equity in both Clear Channel and iHeart.

iHeart has until 11:59 p.m. Wednesday to reach an agreement under a forbearance plan announced this morning.

Bankruptcy is not a new word to iHeart. Almost a year ago, on March 15, the company extended an offer to renegotiate $14.6 billion of more than $20 billion in debt by exchanging bonds with longer maturities and higher yields.

Last week, Liberty Media and its SiriusXM division offered to infuse $1.159 billion into iHeartMedia. SiriusXM and Liberty would then own 20% of a court reorganized iHeartMedia. Creditors appear to have rejected the terms of this specific offer, but talks are ongoing.

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Ryan
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