Leading US radio company iHeartMedia, which runs some of the country's most popular Top 40 stations, has filed for bankruptcy protection as it struggles to pay $20 billion in debt.
The Texas-based company said in a statement dated Wednesday that it was confident it had enough cash on hand to stay operational and that it had reached understandings to halve its debt.
iHeartMedia runs 850 stations including 106.7 Lite FM, a New York soft rock channel which enjoys the highest listener numbers in the United States, and KIIS-FM, the premier Top 40 station in Los Angeles.
While traditional radio has been shaken by the rise of streaming, iHeartMedia's immediate problems stem from a messy process a decade ago for a leveraged buyout, which is when management buys a controlling share of a company with outside help.
Buyers led by Bain Capital, the investment firm co-founded by former presidential candidate Mitt Romney, agreed in 2006 to $26.7 billion funded by big banks for the company then known as Clear Channel Communications.
But with the global economic crisis soon biting, the banks balked and under a settlement iHeartMedia was saddled with the crushing debt to them.
iHeartMedia, which last month missed an interest payment, said in its bankruptcy announcement that it had reached deals with debt holders to clear $10 billion of its burden.
Bob Pittman, the chairman and CEO of iHeartMedia, said that the deal would help in "achieving a capital structure that finally matches our impressive operating business."
"We have transformed a traditional broadcast radio company into a true 21st century multi-platform, data-driven, digitally focused media and entertainment powerhouse with unparalleled reach," he said in the statement.
iHeartMedia, which has had repeated layoffs since its leveraged buyout, has moved to change with the times including by launching the iHeartRadio streaming service to compete with on-demand platforms such as Spotify.
The company has also built a strong presence on social media and on Sunday had its latest iHeartRadio Music Awards, a fan-voted televised gala.