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Broadcast and internet radio company iHeartMedia Inc., which owns internet station iHeartRadio, is preparing for bankruptcy, and the move could come as soon as this weekend.
Bloomberg News reports that iHeartMedia’s senior creditors have seen bankruptcy papers that would be used in any upcoming court filing. The company has been negotiating the terms of its restructuring plan but the Bloomberg report states that a bankruptcy filing is all but certain as iHeart missed a Feb. 1 interest payment and the 30-day grace period is almost over.
The company, led by chairman and CEO Bob Pittman, the former COO of America Online and later of AOL Time Warner, has also missed payments on two sets of bonds. IHeart has a debt pile of $20 billion, the legacy of a leveraged buyout in 2008.
Liberty Media offered to stave off a bankruptcy filing at the 11th hour and inject cash into iHeart, but Bloomberg reports the offer from John Malone’s company wasn’t high enough for iHeart’s creditors.
According to reports, Liberty would have invested $1.16 billion, acquiring 40 percent of iHeart in the process, though not without a reorganization of iHeart. Liberty, the owner of SiriusXM Radio, already owns a significant amount of iHeart’s debt, and talks between the companies are still ongoing people familiar with the matter told Bloomberg.
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