Clear Channel Communications may not be able to avoid filing bankruptcy after two senior lenders reportedly rejected CCC’s debt-swap proposal.
The New York Post, citing unnamed sources, reported May 22 that private equity firms THL Partners and Bain Capital, which bought the radio and billboard company for $27 billion in a leveraged buyout, reportedly got the cold shoulder from the company’s largest lenders on the proposal.
The proposal reportedly included swapping $15 billion in debt for $2.5 billion owed to the company by Clear Channel’s outdoor ad business. However, should the two sides remain at odds, CCC, THL and Bain could be seen as violating terms of its loan agreements and trigger the bankruptcy.
Meanwhile, CCC’s owners are reportedly optimistic a solution can be found either through flexibility in its loan agreements or by pumping more money into the business, the Post said.
CCC began laying off employees in January, with 590 more jobs cut as of April in a second round of massive layoffs to try to offset the effects of a slumping economy and online media competition.