Creditors squeeze iHeart to dump Moelis

iHeart Communications, months into a seemingly stagnating effort to restructure its debt, has been asked by its creditors to replace its restructuring adviser, Moelis & Co., The Post has learned.

The creditors want an ownership stake in the radio giant in exchange for forgiving some of the $20 billion in debt — but that equity stake offer has not yet been made, sources said.

At present, iHeart has only a 50-50 chance of reaching a restructuring deal with creditors and avoiding a bankruptcy by early 2018, according to a lead institutional iHeart lender.

iHeart, when asked if it had been asked to replace Moelis or if it planned to replace Moelis, said, “Moelis continues to be the firm advising us in connection with our restructuring.” It declined to comment further. The request by creditors to replace Moelis comes just weeks before iHeart is expected to offer a new proposal to creditors, the lender said.

Private equity firms Bain Capital and Thomas H. Lee Partners in 2008 bought America’s biggest radio operator, formerly known as Clear Channel, in a highly leveraged $27 billion buyout. iHeart presently has 855 radio stations, including New York’s Z100 and 103.5 KTU.

iHeart, which is operationally profitable, had a net loss of roughly $300 million last year after making $1.8 billion in debt payments.

On May 25, iHeart extended the same 75 cents on the dollar plus warrants restructuring proposal for the fifth time to bondholders. Creditors representing less than 1 percent of the company’s debt have accepted the deal, iHeart said.

Some iHeart bondholders would prefer bankruptcy, in which, they believe, they would be paid in full. Other creditors are seeking an offer of 90 cents on the dollar, sources said.