In a prearranged bankruptcy worked out with creditors, debt burdened radio conglomerate iHeartMedia, with 850 stations, many of them losing money, has been giving some breathing room to shed under-performing stations and focus upon growth potential stations that are profitable.
The company has been saddled with $20 billion in debt, the legacy of a leveraged buyout in 2008. In a statement, the company said it had reached an agreement with the holders of more than $10 billion of its debt.
According to the bankruptcy filing, secured creditors are owed $18.4 billion; an additional $6 billion is unsecured with three noteholders being owed $2.4 billion.
Of the 30 largest unsecured claims, Vertical Bridge is the 14th largest, being owed $2,229,901 under a lease agreement.
In late 2014, iHeartMedia struck a deal with Vertical Bridge to sell an undisclosed group of its radio towers to the company for up to $400 million.
“We are excited to add this high quality tower portfolio to our existing assets,” said Alexander L. Gellman, CEO of Vertical Bridge Holdings, LLC in the deal’s announcement. “We are looking forward to a strong partnership with iHeartMedia”
In 2015, Vertical Bridge and Clear Channel Outdoor Holdings, Inc., a subsidiary of iHeartMedia Inc., announced the signing of an exclusive multi-year agreement for the management and marketing of wireless deployment on Clear Channel Outdoor America’s (CCOA) billboards and other out-of-home assets in 45 of the top 50 U.S. markets
The iHeartMedia Chapter 11 filing didn’t include the profitable billboard unit.
Under the terms of the agreement, Vertical Bridge has the exclusive rights to antenna and small cell site deployment across CCOA’s multi-platform footprint.These small cell base stations will significantly improve concentrated bandwidth and enable capacity increases for mobile services, while enhancing the user experience.
On March 20, another radio station group filed Chapter 11 bankruptcy. MGTF Radio Company, LLC, dba Steel City Media in Kansans City, Mo. placed their debts and assets in the $50 to $100 million range, listing American Tower Corp. as one of their 20th largest creditors, being owed $22,431.
