iHeartMedia files for bankruptcy

The owner of the nation's biggest radio station operator, iHeartMedia, filed for bankruptcy protection from its creditors, the company announced early Thursday morning.

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The San Antonio-based company, which owns 856 stations and controls Clear Channel Outdoor Holdings, one of the world's biggest billboard firms, said it reached an agreement in principle for a balance sheet restructuring.

The deal, which has been filed with a bankruptcy court in Houston, was made with holders of more than $10 billion of its outstanding debt and its financial sponsors.

Clear Channel Outdoor and its subsidiaries have not applied for creditor protection.

“The agreement we announced today is a significant accomplishment, as it allows us to definitively address the more than $20 billion in debt that has burdened our capital structure," CEO Bob Pittman.

The news comes after Liberty Media Corp. proposed buying a 40% stake in a restructured version of iHeartMedia for $1.16 billion on Feb. 26. Liberty, controlled by John Malone, owns satellite radio service Sirius XM Holdings.

Earlier in February, iHeartMedia failed to make a $106 million bond payment, and utilized a 30-day grace period to strike a deal with its bondholders.

Private equity firms Bain Capital Partners and Thomas H. Lee Partners purchased the radio station and billboard giant – then Clear Channel – in 2008 for $17.9 billion. The two firms control about 68% of voting stock of iHeartMedia, according to the company’s most recent annual filing with the Securities and Exchange Commission.

The Pink Sheet stock closed at $0.48 on Wednesday and has fallen about 14.5% this year.