Finsbury Tunes In To iHeartMedia's Chapter XI

Finsbury Tunes In To iHeartMedia's Chapter XI

IHeartMedia Inc filed for Chapter 11 bankruptcy on Thursday as the largest USA radio station owner reached an agreement with creditors to more than halve its $20 billion in debt.

A press release says that iHeartMedia has reached an agreement with creditors that will restructure the company's debt and shed about $10 billion of it.

On Monday it disclosed that it continued exchanging proposals with creditors, but no agreement had been reached.

iHeart radio owns several stations locally, including Talk Radio 570 AM and Mix 98.9.

iHeartMedia believes that its cash on hand, together with cash generated from ongoing operations, will be sufficient to fund and support the business during the Chapter 11 proceedings.

After weeks of uncertainty iHeartMedia are moving to resolve their massive debt by filing for bankruptcy. The brand has almost 850 radio stations.

IHeartMedia traces its roots to the 1972 purchase of KEEZ-FM in San Antonio, Texas, where the company is now headquartered. Much of the borrowing has its roots in the leveraged buyout staged by Bain Capital and Thomas H. Lee Partners in 2008. It also is the producer of syndicated radio shows featuring Ryan Seacrest the host of American Idol and political personalities such as Sean Hannity and Rush Limbaugh.

The company is struggling under the weight of $20bn in debt, but told investors Wednesday (March 14) that it had agreed a restructuring deal with the holders of more than $10bn of this figure. It's $20 billion in debt makes it the largest bankruptcy in the previous year, and around the 30th largest ever.

What's interesting is that the long-time radio honcho also operates iHeartRadio's music streaming service, which hasn't been able to compete with culture mavens like Spotify and Pandora.

Their lawyer said at Thursday's hearing they plan to file a lawsuit to challenge the contention that they are low-priority unsecured creditors, and Isgur said he wanted a hearing on that dispute before April.

In Boston, iHeartMedia Inc. owns WBZ NewsRadio 1030, WRKO AM680, KISS 108, and several other stations.