iHeartMedia in Anther Bondholder Dispute
iHeartMedia is back in a Texas court, seeking hundreds of millions of dollars from bondholders. The broadcaster says the previous legal dispute with bondholders delayed plans to re-finance debt, reports the San Antonio Express News.
We reported the broadcaster won a suit in May against the same bondholders. The judge declared iHeartMedia did not break its debt covenants when it moved some of its stock from one subsidiary to another, as the bondholders alleged.
iHeart has some $20 billion in debt. Its subsidiary Broader Media purchased senior debt due in 2018 that carried a 10 percent interest rate and had an original face value of $383 million for $222 million. But the company said the purchase was more than $100 million higher than it would have paid in February, reported the San Antonio Express News.
That transaction was delayed by the previous court case; that’s why iHeart is back in court. It says the delay cost the company between $100 and $475 million in damages.
When RBR+TVBR asked for comment, a company spokeswoman said: “We are always exploring avenues for improving our capital structure that position the company for long-term growth.
Following a ruling in our favor by the State District Court in Bexar County, Texas in litigation with a small group of our senior lenders, we repurchased some of our debt, as we have done in the past and as permitted by our financing documents.”
iHeart filed the latest lawsuit in the same court July 26 “to reaffirm our position that such debt repurchases are permissible. We believe these repurchases are in the best interests of the company and its stakeholders,” said the spokeswoman.
“We intend to take any other actions necessary to protect the company and will continue to explore opportunities to strengthen our capital structure.”
RBR+TVBR observation: We’ve reported numerous times financial experts have told us the broadcaster needs to re-structure its debt to get it down to a reasonable level — likely at least half of what it is now.