iHeart’s time is up

A month ago, creditors filed a notice of default for allegedly violating the terms of the loan agreements. A friendly judge in Texas gave iHeart 15 days to resolve the issue, and another 15 day extension. iHeart broke off negotiations and has not satisfied the creditor concerns.

That means the 60 day countdown to default has started. If this isn’t resolved, $12 billion will become immediately due, which will trigger the other $10 billion to also become in default.

Chicago Tribune coverage

The clock is ticking. Meanwhile CBS is moving forward with the idea of doing an IPO to spin off CBS Radio to shareholders.

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5 Responses to iHeart’s time is up

  1. briand75 says:

    All is moving very slowly. I suppose that indicates how few ideas for solutions there are. An IPO may do it – the one reliable way to generate capital.

  2. briand75 says:

    The possibility of a complete radio failure looms large. iHeart has penetrated so many markets and has such a reliable stream – one would think they were making money hand over fist. If the advertising and the huge concerts and all of the personalities involved can’t generate value…

    • Fred Stiening says:

      iHeart has sizable cash flow – the problem is the free cash flow is now less than their debt service.

      By the way, don’t even think of buying the iHeart class A stock or Clear Channel Outdoors. People who don’t follow what the company often do a stock symbol lookup and fail to notice they aren’t remotely buying what they think. IHRT is a pink sheet stock with essentially no value. When Clear Channel “went private”, these were shares not tendered to the two private equity firms. My impression is they were mostly held by the Mays family or perhaps employees with outstanding stock options. They get no dividend and will be the first thing wiped out in bankruptcy if it comes to that.

  3. Fred Stiening says:

    iHeart friendly local San Antonio judge has pushed off the date to May 16th

    http://www.expressnews.com/business/local/article/Judge-postpones-ruling-on-iHeartMedia-sets-new-7232657.php

    Ball is in the creditor’s court if they want to be more aggressive and perhaps seek help from a Federal Court

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