iHeartMedia Bankruptcy Talks Extended Through Monday

The deadline to submit a plan for an orderly bankruptcy of iHeartMedia, its 855 radio stations, streaming service and other assets has been extended through 11:59 PM CT on Monday, March 12th. The news came via a new SEC filing from the publicly traded company.

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iHeartMedia and its $20 billion in creditors are clearly still talking, with negotiations and a pending bankruptcy now facing an extended 11:59 PM CT Monday, March 12th deadline, according to a new Securities and Exchange Commission filing.

A plan filed with the SEC would reduce iHeartMedia's debt from $20.6 billion to under $5.8 billion, as part of a Chapter 11 bankruptcy reorganization plan. Clear Channel Outdoor Holdings, iHeart's billboard and outdoor advertising division, would be spun off. 

Bondholders will receive both stock in Clear Channel and equity in a newly recapitalized iHeart.

The fall of iHeartMedia began a decade ago when private equity firms Bain Capital and Thomas H. Lee Partners bought what was then called Clear Channel and financed the $20 billion deal with loans equal to 9 times the company’s pre-tax cash flow. That's 50% higher than the 6X leverage limit  set by the federal government in 2013.  The Trump administration has said that they will remove all such limits soon.

Since then, iHeart has struggled. In 2016, the company's  net loss was about $300 million including $1.8 billion in debt payments.  So a managed bankruptcy with lower debt payments could make the media giant a viable company again. That appears to be the goal as major creditors and iHeart execs huddle to prepare to file court papers, likely early this week, according to multiple reports.