A U.S. court has approved the bankruptcy plan of iHeartMedia, the biggest radio broadcaster in the U.S., which will shave down its crushing debt load and separate iHeartMedia from Clear Channel Outdoor Holdings.
The company said chairman and CEO Bob Pittman and Rich Bressler, president, COO and CFO, have extended their contracts by four years. The execs will remain in their respective roles following the completion of restructuring process.
Under the terms of the Chapter 11 reorganization plan, iHeartMedia will restructure its balance sheet, reducing its debt from $16.1 billion to $5.75 billion. The plan calls for iHeartMedia and billboard operator Clear Channel Outdoor to be separated, creating two independent public companies. Last month, iHeartMedia said more than 90% of the votes cast by creditors and shareholders who participated in voting for the bankruptcy plan were in favor of the reorg terms.
With the court’s approval of the plan, the company expects the bankruptcy reorg to be completely finished in the first half of 2019, subject to completion of certain steps related to the separation of Clear Channel Outdoor, FCC registration and other customary conditions.
Formerly known as Clear Channel, iHeartMedia filed for Chapter 11 bankruptcy in March 2018 after amassing more than $20 billion in debt following a leveraged buyout a decade earlier. The company owns more than 850 radio stations, the iHeartRadio music-streaming service and a sizable live concert business.
“We are delighted to reach this significant milestone in our restructuring process, which will give us a new capital structure that matches the strong operating performance of our business,” Pittman said in a statement. “iHeartMedia’s unique place in the advertising world perfectly positions us to take advantage of the renaissance underway in audio.”
The iHeartMedia reorganization plan was confirmed by the U.S. Bankruptcy Court for the Southern District of Texas in San Antonio.
Kirkland & Ellis LLP is serving as legal counsel to iHeartMedia, Moelis & Company is serving as investment banker, and Alvarez & Marsal is serving as the company’s financial adviser.