iHeartMedia has received necessary approval for its Chapter 11 bankruptcy plan, which will cut its debt load and spin off its outdoor advertising business. The company expects to complete its restructuring process in the first half of the year.
iHeartMedia Chairman and CEO Bob Pittman and President, Chief Operating Officer and Chief Financial Officer Rich Bressler have extended their contracts by four years, keeping them in their roles throughout and following the restructuring process.
Under the terms of the reorganization plan, iHeartMedia must complete an intensive restructuring of its balance sheet that will reduce its debt from $16.1 billion to $5.75 billion and fully separate the Clear Channel Outdoor Holdings business as its own independent public company. iHeartMedia owns 89.1 percent of Clear Channel Outdoor Holdings and the billboard company was not part of the bankruptcy filing.
As previously announced, once Clear Channel Outdoor Holdings is separated from iHeartMedia, William Eccleshare will become the company’s CEO. The London-based executive is currently CEO of Clear Channel International, which he joined in 2009. Scott Wells will continue as CEO of Clear Channel Outdoor Americas, reporting to Eccleshare.
As part of iHeartMedia’s bankruptcy filing, the company previously announced it had reached an agreement to cut its debt through debt-to-equity swaps with some shareholders. Those deals allowed the company to continue operating and speed up the bankruptcy process. The restructuring plan’s timeline is dependent on completion of FCC registration and other customary conditions relating to that process.
“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,” said Pittman in a statement. “iHeartMedia’s unique place in the advertising world perfectly positions us to take advantage of the renaissance underway in audio.
“Our ability to advance through the restructuring process this smoothly is a testament to both the strength of our operating business and the strong support of our stakeholders, including our debtholders who will become our owners, our advertising partners and our operating team.”
Known as Clear Channel until 2014, iHeartMedia filed for Chapter 11 bankruptcy in March 2018 after accumulating $20 billion in debt from a leveraged buyout a decade earlier. iHeartMedia owns and operates more than 850 radio stations, as well as the iHeartRadio streaming radio and music service, which claims over 100 million users, and major events including the iHeartRadio Music Festival and the iHeartRadio Fiesta Latina.