Davis: ‘Whisper Campaign’ Hurts iHeart
The business of calming partners, lenders and employees worried about potential bankruptcy “is disrupting our business every day,” iHeartMedia President Darren Davis tells a court in San Antonio, Texas.
The company’s line of credit was recently reduced from $1.5 million to $50,000, he said, according to Bloomberg.
He described a “whisper campaign” by some of iHeart’s senior lenders who opposed the company’s December move of $500 million in shares to an unrestricted subsidiary so it can buy back some debt at a discount. The broadcaster said the move was allowed under its debt covenants and the lenders disagree, threatening to call defaults on some $6 billion in notes.
That’s at the heart of the trial, going on this week.
iHeart owes some $20 billion in debt. Davis told the judge the company has had the same amount of debt for the last eight years and “we’ve never had a bankruptcy threat until the last 60 days,” Bloomberg reports. Davis believes iHeart can make the payments.
In the meantime, lenders and partners worries are chilling some business for iHeart, he testified, affecting new technology that the company is trying to roll out and new hires.