In a filing with the SEC, iHM the self-imposed debt for a deal has now bee pushed back to 11:59 PM Monday, March 12. The original deadline had been last night at 11:59 PM.
As previously disclosed, on March 4, 2018, iHeartCommunications, Inc. (“iHeartCommunications”), an indirect subsidiary of iHeartMedia, Inc. (“iHeartMedia”), and certain lenders party thereto (the “Consenting Lenders”) entered into a Forbearance Agreement (the “Forbearance Agreement”), with respect to the Credit Agreement, dated as of May 13, 2008, as amended and restated as of February 23, 2011 (as further amended or supplemented from time to time, the “Credit Agreement”), among iHeartCommunications, as the parent borrower, the subsidiary co-borrowers and foreign subsidiary revolving borrowers party thereto, iHeartMedia Capital I, LLC, as holdings, Citibank, N.A., as administrative agent, swing line lender and letter of credit issuer, and the other the lenders from time to time party thereto.
On March 7, 2018, iHeartMedia and the Consenting Lenders extended the term of the Forbearance Agreement to the earliest to occur of (i) March 12, 2018 at 11:59 p.m. Central time and (ii) an event of default under the Credit Agreement other than those that resulted in the entry into the Forbearance Agreement.The two sides now have another five days to complete a deal.
It's been reported that reorganization plan with creditors would wipe out most if its debt in bankruptcy. In return, current owners Bain Capital and Thomas H. Lee Partners would be wiped-out.
The company’s financial unbalance began in 2008 when private equity groups Bain Capital and Thomas H. Lee Partners purchased Clear Channel Communications in a highly leveraged deal valued at about $24 billion. That was about the time the U.S. economy was seesawing on its way into a deep recession.
The strategy being played by iHeartMedia is similar to that Cumulus, analysts say. That broadcaster, mired in $2.4 billion of debt, filed for voluntary bankruptcy protection in November 2017 after entering into a Restructuring Support Agreement with lenders holding almost 70% of the company’s term loan.
Meanwhile, Cumulus reports “significant progress” in its restructuring process. An original 120 days to keep any competitive plans off the table expires on March 29. Cumulus wants that date extended to May 28.
The exclusivity period gives the debtor (Cumulus) an opportunity to negotiate the settlement of its debts by proposing and soliciting support for its plan of reorganization without interference from competing plans from its creditors or others in interest.
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