iHeartMedia has “going concern” on its future after $248m quarterly loss
Can iHeartMedia Inc., the largest operator of commercial radio stations in the US, last another 12 months as possible bankruptcy looms?
The San Antonio-based company itself has “going concern” about its future after its latest financials for the Q3 September quarter showed a loss of $248 million and revenue of $1.54 billion.
Both were down from the same period last year when revenue was $1.57 billion and the loss was $35 million.
As a result, iHeartMedia warned investors that it was in dire financial straits and noted that “there is substantial doubt as to the company’s ability to continue as a going concern for a period of 12 months following November 8, 2017.”
The company says its lacklustre revenue flow will affect its ability to keep up with debt repayments “which in turn could reduce our financial flexibility and ability to fund other activities.”
Company debt increased from $20.4 billion as of June 30 to $20.6 billion now.
At the end of September, iHeartMedia had debt maturities totalling $366.9 million, $308.5 million and $8.368 billion in 2017, 2018 and 2019, respectively.
Much of its debt comes from 2008 when two Boston-based private equity firms, Bain Capital Partners and Thomas H. Lee Partners, bought 70% of the company, then called Clear Channel.
iHeart said it is in “advanced negotiations with potential lenders to refinance” its debt, extending bond maturities and giving it more time to repay notes that start maturing in early 2018.
It had already warned earlier this year that it might not make this payment.
Late last week it warned that bankruptcy remained a viable option.
iHeart owns more than 850 radio stations. It operates several mobile apps and sponsors major events such as the annual iHeartRadio Festival and the iHeartRadio Fiesta Latina.
As a result of the news, iHeartMedia stocks free-fell by 54% but regained some ground the day after.