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iHeartMedia facing bankruptcy

By | Published on Monday 24 April 2017


iHeartMedia has warned investors that it may be forced into administration before the end of the year, with a $350 million debt repayment due in the coming months.

The biggest radio broadcaster in the US, and owner of the iHeartRadio streaming service and Clear Channel billboard advertising business, the iHeart company took on $20 billion of debt during a $24 billion private equity buyout in 2008. If it manages to make this year’s hefty repayment, it still has a far more significant $8.3 billion due in 2019.

In a new filing with the US Securities And Exchange Commission, the company says: “Management anticipates that our financial statements to be issued for the three months ended 31 Mar 2017, will include disclosure indicating there will be substantial doubt as to our ability to continue as a going concern for a period of twelve months following the date the first quarter 2017 financial statements are issued”.

The company is attempting to defer up to $14 billion of its debts, though without much success so far. There was a recent arrangement in relation to $476 million due in 2018, but bankruptcy now seems increasingly likely.

Last year, of course, the company launched a new on-demand streaming service powered by Napster. The aim is the complement its existing personalised radio operation, while also incorporating programming from its network of AM/FM stations to distinguish its product in a crowded market place. Whether this new part of the business will be an attractive proposition to anyone involved in taking the company out of any future bankruptcy remains to be seen.