The long, bumpy path to an emergence from debtor-in-possession status is officially nearing its terminus for the nation’s No. 1 owner of radio stations.
On Tuesday, iHeartRadio filed a 210-page redlined version of its organization plan, which it hoped would meet the approval of the bankruptcy judge overseeing its case.
As such, iHeartMedia is indeed on its way out of bankruptcy with “only” $5.75 billion in debt, compared to $20 billion.
On January 18, a contingency deal with legacy noteholders who expressed their unhappiness to iHeart’s plan was reached.
A redlined version of its Chapter 11 plan of reorganization was filed early Tuesday with the court, overseen by judge Marvin Isgur. In comments distributed later in the day confirming Isgur’s approval, iHeart said expects to complete its restructuring process in the first half of 2019.
Commenting on the OK from Isgur, iHeartMedia Chairman/CEO Bob Pittman said, “We are delighted to reach this significant milestone in our restructuring process, which will give us a new capital structure that matches the strong operating performance of our business. Our ability to advance through the restructuring process this smoothly is a testament to both the strength of our operating business and the strong support of our stakeholders, including our debtholders who will become our owners, our advertising partners and our operating team.”
Pittman noted iHeart accomplishments seen while in bankruptcy – from major acquisitions such as HowStuffWorks and Jelli — to the “continued development and implementation of transformative new technology.”
He said, “We will continue to work together to invest in and grow our innovative and exciting services, cutting-edge products and great programming for decades to come.”
WHAT THE PLAN STATES
Under the terms of the Plan, iHeartMedia will complete a comprehensive balance sheet restructuring that will reduce its debt from what is now $16.1 billion to $5.75 billion — an amount first shared by Pittman at Forecast 2019 in New York, held in November.
A separation of Clear Channel Outdoor Holdings from iHeartMedia will move forward as expected, creating two independent public companies.
With the completion of the restructuring process, Pittman and President/COO and CFO Rich Bressler will remain in their roles, with their contracts each extended by four years.