NY Post: Clear Channel Risks 'Collapse'
April 12, 2010 at 6:34 AM (PT)
CLEAR CHANNEL COMMUNICATIONS risks "likely collapse" if it can't restructure its debt in the next few years, reports THE NEW YORK POST, which claims "that is exactly what some of its large creditors want."
"There have been various initiatives over the last month," said a source close to the situation to THE POST. However, CLEAR CHANNEL's private-equity owners, BAIN CAPITAL and THL PARTNERS deny the report, with a spokesman saying, "There have been no discussions" between the owners and creditors since they clashed in DECEMBER.
Back in FEBRUARY (NET NEWS 2/25), MOODY'S INVESTOR SERVICE said in a report that a restructuring of CLEAR CHANNEL COMMUNICATIONS "is inevitable," although owners BAIN CAPITAL and THOMAS H. LEE PARTNERS may try to delay it as long as possible."
BAIN and THL bought CLEAR CHANNEL in 2008 -- as a $24 billion leveraged buyout. "It may take about four years, but if the company can't manage to change its capital structure, it will ultimately default on its $18.4 billion debt," the report said. "The company has $700 million coming due in MAY 2011, and $4.5 billion due in JULY 2014. Nearly $2 billion of cash on hand should allow it to make it through 2011, but 2014 is another matter, sources said."
[Do you see more financial difficulties ahead for radio, or is there light at the end of the tunnell? Share your thoughts below.]