iHeartMedia filed with the U.S. Bankruptcy Court a Chapter 11 Plan of Reorganization and related Disclosure Statement.
According to the Disclosure Statement, “The proposed Plan achieves a value-maximizing restructuring that comprehensively addresses the Debtors’ funded debt obligations and positions their businesses for continued growth and long-term success. As a result of extensive negotiations with groups representing their primary stakeholders, the Debtors entered into a restructuring support agreement on March 16, 2018. As a result, the transactions embodied by the Plan enjoy the support of Holders of nearly $12 billion of outstanding debt obligations across the Debtors’ capital structure (including outstanding indebtedness held by the Debtors and their Affiliates), as well as the Debtors’ equity sponsors. The Plan will reduce the Debtors’ funded debt by nearly two-thirds – approximately $10.3 billion – and will result in the separation of the iHeart business and CCOH businesses through either a Tax-Free Separation or a Taxable Separation (the ‘CCOH Separation’).”
The Disclosure statement continues, “The Plan provides for a global compromise and settlement of all Claims, Interests, Causes of Action, and controversies released, settled, compromised, discharged, or otherwise resolved pursuant to the Plan, and contemplates that: the iHeart business and CCOH businesses will be separated through either a Tax-Free Separation or a Taxable Separation; Reorganized iHeart will emerge from chapter 11 with New Secured Debt of $5.75 billion that will be secured by substantially all assets of Reorganized iHeart with a 5 – 7 year maturity, as well as a new ABL facility that will, among other things, provide working capital and fund distributions under the Plan; Senior Creditors collectively will share, in the manner described in detail below, in (i) 100 percent of iHeart’s equity interests in CCOH (as separated from iHeart), (ii) $5.55 billion of the New Secured Debt, (iii) all Excess Cash, and (iv) 94 percent of the equity in Reorganized iHeart; Holders of Unsecured Debt Claims will receive their Pro Rata share of (i) $200 million of the New Secured Debt and (ii) 5 percent of the equity in Reorganized iHeart; and Holders of iHeart Interests will receive 1 percent of the equity in Reorganized iHeart.”
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