iHeartMedia Delays Filing Of 2017 Annual Report, Tells SEC Hong Kong Subsidiary Probing Misappropriation Of Funds

Delay

iHEARTMEDIA's annual Form 10-K report to the SEC for 2017 is going to be delayed due to a delay in completing financial statements for CLEAR MEDIA LIMITED because several employees of that subsidiary, traded on the HONG KONG STOCK EXCHANGE, are "subject to an ongoing police investigation for misappropriation of funds" and the parent company's Chapter 11 filing has caused additional delays.

The company told the SEC in a filing TODAY (4/3) that CLEAR MEDIA LIMITED "is conducting additional procedures and processes, including a special investigation by forensic accountants and an external law firm... into the misappropriation of funds. During the course of the special investigation, it was discovered that three bank accounts were opened in the name of CLEAR MEDIA LIMITED entities, which were not authorized, and certain transactions were recorded therein. These matters have been referred to the police for investigation."

No date has been given for the completion of the financial statements, and the company told the SEC that because its Chapter 11 filing came at the same time as the financial statements were being prepared, it became "necessary and prudent to delay the filing of the Annual Report to allow management to focus on providing the required information and making the necessary filings with the Bankruptcy Court in the Chapter 11 Cases."

In the filing TODAY, iHEARTMEDIA said that it expects to report consolidated revenues of approximately $6.171 billion for 2017, down from $6.26 billion in 2016, blamed on the sale of the company’s AUSTRALIA and TURKEY businesses in the prior year, partially offset by growth in the iHM segment from an increase in national trade and barter plus higher spot sales. Operating income is expected to be about $970 million, down from $1.505 billion, due primarily to net gains of $349 million on the sale of some U.S. properties and the AUSTRALIA and TURKEY businesses in 2016, compared to $39 million of net gains in 2017.

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