Report: iHeartMedia Using Debt Purchases In 'Novel Plan' To Address Debt Problem
December 11, 2015 at 4:49 AM (PT)
The NEW YORK POST is reporting that iHEARTMEDIA is planning to use a "novel plan" to address its debt problem, buying up a "sizable portion" of unsecured debt and converting it to equity to lower interest payments to the breakeven point, then restructuring the rest of its debt to push the maturity dates on senior loans further into the future.
The POST says that the company, which is projected to lose $50 million this year, $80 million in 2016, and $120 million in 2017, can go cash flow positive if it converts $2.4 billion of unsecured debt into equity, saving over $100 million in interest annually. The paper adds that iHEART has so far purchased $500 million of the debt, but the POST's source warns that while most iHEARTMEDIA debt holders will go along with the plan, "there may be holdouts."