San Antonio-based radio conglomerate iHeartMedia has new life after the U.S. Bankruptcy Court for the Southern District of Texas approved its reorganization plan, the company announced Wednesday.
The terms of the restructuring to be completed later this year will reduce the company’s debt from $16.1 billion to $5.75 billion, according to a press release. The plan also calls for a separation from the outdoor advertising arm of the company, Clear Channel Outdoor Holdings, which did not declare bankruptcy along with the rest of the company last year.
Clear Channel Outdoor Holdings will break off and become an independent public company once it has satisfied all the necessary steps to do so, such as Federal Communications Commission registration.
iHeartMedia said in its press release it expects to be finished with the bankruptcy reorganization process once the separation process is complete sometime before the end of June.
The company announced early last year it had filed for Chapter 11 bankruptcy, a process that allows a company to restructure its debts and assets and get back on more solid financial footing.
The company also announced Wednesday that after its restructuring, Bob Pittman, iHeartMedia’s chairman and CEO, and Rich Bressler, who is president, chief operating officer, and chief financial officer, will receive four-year contract extensions and remain in their current roles.
“We are delighted to reach this significant milestone in our restructuring process, which will give us a new capital structure that matches the strong operating performance of our business,” Pittman said in the company’s press release.
The company once was a great San Antonio success story. Businessmen Lowry Mays and Red McCombs founded the company in 1972 with a purchase of a local radio station. It grew over the decades to become Clear Channel Communications and then iHeartMedia with 850 stations on its roster, including KJ97 and WOAI 1200 locally.
Mays and McCombs sold Clear Channel in 2008 to two private equity firms in a deal reported near $25 billion, but it has struggled under the weight of growing debt since the acquisition. It was renamed iHeartMedia in 2014.
“Our ability to advance through the restructuring process this smoothly is a testament to both the strength of our operating business and the strong support of our stakeholders, including our debtholders who will become our owners, our advertising partners, and our operating team,” Pittman said in the press release.