The radio company iHeartMedia filed for Chapter 11 bankruptcy on Thursday.
The largest radio company in the U.S., iHeartMedia operates 850 radio stations across the country. Day-to-day operations at the company, the stations it controls and its mobile app will continue, iHeartMedia announced.
The radio company was buried under overwhelming debt amounting to some $20 billion. In agreement with its stakeholders, iHeartMedia’s debt will be reduced by $10 billion.
“iHeartMedia has created a highly successful operating business, generating year-over-year revenue growth in each of the last 18 consecutive quarters,” iHeartRadio chief executive Bob Pittman said in a statement. “We have transformed a traditional broadcast radio company into a true 21st century multi-platform, data-driven, digitally-focused media and entertainment powerhouse with unparalleled reach, products and services now available on more than 200 platforms, and the iHeartRadio master brand that ties together our almost 850 radio stations, our digital platform, our live events, and our 129 million social followers.”
The company that became iHeartMedia was founded in 1972 and was known as Clear Channel Communications until it changed its name about 10 years ago. At that time, it was acquired in a leveraged buyout, where a buyer borrows money from banks to buy another company, for $26.7 billion. The deal occurred right before the 2008 financial crisis broke open the global economy and iHeartMedia has struggled with the debt obligations ever since.
“The agreement we announced today is a significant accomplishment, as it allows us to definitively address the more than $20 billion in debt that has burdened our capital structure,” Pittman continued.
Shares of iHeartMedia rose 8.33 percent following the announcement to close Thursday at $0.52. The stock has not been valued above a dollar since November of 2017. The stock lost around 75 percent of its value in 2015 and has not recovered in the three years since.
