Is iHeartRadio filing for bankruptcy today?
Reports from the US suggest that iHeartMedia Inc., the broadcast and internet radio company that owns internet station iHeartRadio, is ready to file for bankruptcy on March 5 – and could even have already done it by now.
The company has been battling a US$20 billion debt. While in the midst of trying to restructure it for the past year, it missed an interest payment of $103 million on February 1, and the customary 30-day grace period is over on March 5.
The $103 million was to holders of its 14% senior unsecured notes due 2021.
It also missed payments on two sets of bonds.
The only thing that could save iHeartMedia is SiriusXM Radio owner Liberty Media.
Liberty Media, led by John Malone, which has a huge stake in HeartMedia recently offered to invest $1.16 billion for a 40% stake and the understanding that the company would go through a restructure.
But creditors rejected it, saying the offer was not high enough.
However, at this late stage, Liberty Media is still in discussions with iHeart’s Chairman and CEO Bob Pittman, the former COO of America Online and AOL Time Warner.
A deal could have been struck over the weekend.
Last month iHeartMedia issued a media release that “active discussions” are continuing among its lenders, noteholders, and financial sponsors on the terms of a debt restructuring.
The $20 million debt is made up of a $14.6 billion debt load from its iHeartCommunications subsidiary, and $6.3 billion of its term loan debt.
Last month iHeart investors were seeking an injunction in the New York State Supreme Court to protect their debt seniority against a potential bankruptcy filing.
These so-called “legacy noteholders” own over $200 million in iHeart bonds.
They include the Bank of New York, Mellon Trust, Hutchin Hill Capital and Angelo, Gordon & Co.
The company was known as Clear Channel and changed its name to iHeartMedia, Inc. in September 2014.