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Business News Digital Media
iHeartMedia repeats debts warning as it publishes disappointing financials
By Chris Cooke | Published on Friday 5 May 2017
Management at American broadcaster iHeartMedia, also owners of the iHeartRadio streaming service, have again put out a warning that the company may cease to be a going concern within the year unless ongoing efforts to restructure its mega-debts are successful.
iHeartMedia initially raised concerns about its “ability to continue as a going concern” last month, struggling as it is to restructure the $20 billion of debt taken on during a $24 billion private equity buyout of the media firm in 2008.
The company has now reported that revenues were down and losses up year-on-year for the first quarter of 2017, though the slip in revenues is mainly the impact of currency fluctuations impacting on the group’s global outdoor advertising business Clear Channel. Investment types had expected the somewhat disappointing quarterly financials, though some analysts are questioning why the firm’s expenses were higher than anticipated.
However, the immediate future of the company is more down to whether or not iHeart’s owners and top guard can restructure those debts. There have been no significant developments on that front, hence the company reiterating its previous statement that “there is substantial doubt as to our ability to continue as a going concern for a period of twelve months following 4 May 2017”.
There is some debate over whether or not the outcome of all this will be so called chapter eleven bankruptcy, or not. Some reckon that, while the firm’s money lenders have so far refused to play ball on the debt restructuring, they are mainly standing their ground for a better deal, and will eventually agree to new terms, chapter eleven not being a desirable outcome for anyone really. We’ll see, I guess.
