By David Shepardson
WASHINGTON (Reuters) - The U.S. Federal Communications Commission said Thursday it has approved a petition for iHeartMedia Inc (O:IHRT) investors to exceed the U.S. 25% foreign investment cap.
The company, which filed for bankruptcy in 2018 and then went public in 2019, sought approval in 2019 for foreign creditors to exercise special warrants in exchange for stock in the company.
The San Antonio, Texas-based company had struggled with debt that was taken on by its private equity owners in 2008 to finance a $17.9 billion leveraged buyout of Clear Channel Communications Inc.
The FCC said the petition will "enable iHeart to be in a
stronger financial condition post-bankruptcy and provide the company greater flexibility to access foreign investment capital, thereby allowing iHeart to better compete with other media companies, enhance its programming, and better serve the public interest."
iHeart owns about 850 U.S. radio stations in over 160 markets and its iHeartRadio digital service is available on more than 250 platforms and 2,000 devices.
PIMCO Group sought approval to hold up to 32.99% of the equity interest in iHeart. PIMCO group, which includes Irish and German investors is ultimately controlled by Allianz SE (DE:ALVG). Invesco Group sought approval to own up to 19.99% of iHeart. It has two foreign-organized entities based in Bermuda and the United Kingdom within its funds’ vertical chain of control
The FCC said iHeart must obtain commission approval for any
new or additional foreign entities to hold, directly or indirectly, more than 5% of the equity.
iHeartMedia shares closed up 6.6% before news of the FCC announcement came after the bell.