March 15 (Reuters) – Radio broadcaster iHeartMedia Inc. on Thursday said the company and its units, including iHeartcommunications Inc, filed for Chapter 11 bankruptcy protection.
The company said it reached an agreement with shareholders of more than $10 billion of its outstanding debt.
Cash on hand and cash generated from ongoing operations will be sufficient to fund the business during the bankruptcy process, iHeartMedia said.
“The agreement … is a significant accomplishment, as it allows us to definitively address the more than $20 billion in debt that has burdened our capital structure,” Chief Executive Bob Pittman said.
The filing comes after John Malone’s Liberty Media Corp proposed on Feb. 26 a deal to buy a 40 percent stake in a restructured iHeartMedia for $1.16 billion, uniting the company with Liberty’s Sirius XM Holdings Inc satellite radio service.
Clear Channel Outdoor Holdings Inc, a subsidiary of iHeartMedia, and its units did not commence Chapter 11 proceedings.
IHeartMedia skipped a $106 million interest payment on Feb. 1, triggering a 30-day grace period during which the company has tried to hammer out a deal with it bondholders.
Shares of iHeartMedia lost three-quarters of their value in the second half of 2015 and have never recovered. On Monday, the pink sheet stock closed at 48 cents.
IHeartMedia traces its roots to the 1972 purchase of KEEZ-FM in San Antonio, Texas, where the company is currently headquartered. It also produces syndicated radio programs that feature “American Idol” host Ryan Seacrest and political personalities Rush Limbaugh and Sean Hannity.
The company had 14,300 employees at the end of 2016, according to its most recent annual report.
The bankruptcy proceedings were filed in a Texas court.