Media conglomerate iHeartMedia filed for an initial public offering this week. It came just two months after the United States Bankruptcy Court for the Southern District of Texas had confirmed the company’s Chapter 11 bankruptcy plan along with a plan of re-organisation.
According to the company’s IPO form S-1 registration statement filed with the Securities and Exchange Commission to list its Class ‘A’ common shares, the IPO is underwritten by Goldman Sachs and Morgan Stanley which proposes a maximum aggregate offer amounting at $100 million temporarily.
Currently trading in pink sheets, the company stated that it would be having two classes of shares. Neither a set number of shares iHeartMedia was offering, nor a set price range was disclosed.
Competing against established streaming music services like Spotify, Pittman’s company must now provide investors with a compelling reason to invest in traditional radio.
“Our goal is to be everywhere our listeners want to find us by having a presence on all major and emerging platforms. We believe our differentiated reach, national footprint with local execution, best-in-class engagement and shared infrastructure provide us with a strong foundation and operating efficiencies as we expand onto new platforms,” the company said in its IPO filing.
Under the terms of the bankruptcy reorganisation plan that was approved in January 2019, iHeartMedia must complete an intensive restructuring of its balance sheet that will reduce its debt from $16.1 billion to $5.75 billion and fully separate the Clear Channel Outdoor Holdings business as its own independent public company. iHeartMedia owns 89.1 per cent of Clear Channel Outdoor Holdings and the billboard company was not part of the bankruptcy filing.
iHeartMedia intends to use the net proceeds from the offering to pay off its debt.
“Our strategy is centered on building strong consumer relationships with national reach. Providing this kind of at-scale companionship creates high-value advertising inventory for current audio advertisers as well as new advertisers and delivers superior returns to both. Moreover, we believe that we can leverage our investments in technology and data-informed decision making to capture increasing market share of the long tail of national and local revenue,” the media company added.
In March 2018, iHeartMedia filed for Chapter 11 bankruptcy after accumulating more than $20 billion in debt from a leveraged buyout a decade earlier. The company owns and operates more than 850 radio stations, as well as the iHeartRadio streaming radio and music service. It also claims over 100 million users and major events including the iHeartRadio Music Festival and the iHeartRadio Fiesta Latina.
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