iHeartMedia on the verge of collapsing under $20bn debt burden?

iHeartMedia , one of the US music business’s most important media partners has admitted that it may go bust before the end of 2017.

The company has long been the subject of Wall Street speculation due to its massive debt load: it is, indeed, shouldering a debt of approximately $20 billion – largely thanks to a $24bn leveraged buyout of billboard advertising giant Clear Channel Communications Inc, by private equity backers Bain Capital and Thomas H. Lee Partners in 2008. Nearly $350m of that debt is due to be paid this year, with another $8.3bn to be satisfied in 2019.

On April 20, iHeartMedia reported its preliminary fiscal results for the three months ended March 31 this year. It said its consolidated revenue for the period stood at $1.33bn, with a consolidated operating income of $114.1m.

The document, however, contained a line scary enough to put shareholders’ iHearts in their iMouths:

Based on the significance of the forecasted future negative cash flows… management anticipates that our financial statements to be issued for the three months ended March 31, 2017 will include disclosure indicating there will be substantial doubt as to our ability to continue as a going concern for a period of 12 months following the date the first quarter 2017 financial statements are issued as a result of uncertainty around our ability to refinance or extend the maturity of our receivables based credit facility, to achieve our forecasted results, and to achieve sufficient cash interest savings from the pending Exchange Offers and Term Loan Offers.

According to financial reports filed on April 21, the company’s creditors are blocking attempts to restructure its debt.