iHeartMedia Says Business Will Continue During Debt Restructuring

The largest American radio broadcaster, iHeart Media, said Wednesday it has reached an agreement in principle with its debt holders and financial sponsors that would allow it to continue operating its business, The Wall Street Journal reported.

What Happened

The agreement allows iHeartRadio to address more than $20 billion in debt and marks a "significant accomplishment" for the company, whose products and services are available on more than 200 platforms and spans almost 850 radio stations, Chairman and CEO Bob Pittman said in a statement. 

The broadcaster and some of its subsidiaries filed for Chapter 11 bankruptcy relief in U.S. District Court. 

Why It's Important

The company said it will have enough cash on hand to sufficiently fund its operations during the Chapter 11 proceedings, a vital component given the company's reach of 271 million people in the U.S. per month is more than any other media and technology company, including Facebook Inc FB.

The restructuring could lead some investors to conclude that iHeartMedia will remain a competitor to streaming music companies like Pandora Media Inc. P. Pandora shares were trading lower by more than 1 percent early Thursday afternoon, while at the same time all three major indices were solidly in the green.

What's Next

Ultimately, iHeartMedia's business will emerge from bankruptcy "substantially more valuable," Cowen media analyst Lance Vitanza told WSJ.

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