6-9-14
In a piece entitled, "Clear Channel Chief Gambles on Wrestling its Debt," The Times writes that if CEO Bob Pittman is making any progress fixing Clear Channel's debt problems, it's been very slow. "Its radio revenue was up just 4 per cent in 2013. Pittman expects growth to accelerate, but even more important to averting bankruptcy has been a series of debt restructurings that have taken advantage of yield-hungry capital markets to push back a looming wall of maturities."
A recent $850 Million refinancing (with a 10% interest rate) pushed repayments back from 2014 and 2015 to 2018. The Times points out that Clear Channel?s expected interest expense of about $1.6bn in 2014 is about equal to its free cash flow. "The debt burden gives him little room for error, but like an experienced radio pitchman, he sounds confident that his $5m gamble will pay off. If the company?s not going to grow I?ll get no money back,? Pittman said, adding that because Clear Channel has so much leverage, it ?supercharges? any upside. His return, on a $5 million investment would be ?50:100 to one if it works?.
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