RADIO ONLINE | Friday, August 11, 2017 |2:28pm CT

The biggest creditor of iHeartMedia is working on a restructuring plan that could save the radio giant from bankruptcy, reports the New York Post. Mutual fund Franklin Resources is preparing a proposal to present to other iHM creditors and iHeartMedia as early as next week, a source close told the newspaper. However, Franklin may ask for more cash guarantees and possibly a controlling equity stake in return. Franklin currently owns $2.3 billion of iHeartMedia's $20 billion in debt.

According to the Post, Franklin's adviser, PJT Partners, has recommended not pushing iHeartMedia into a bankruptcy, a last-ditch scenario which likely would result in a sale of the most profitable of its 855 stations. In addition to keeping iHM's best stations, Franklin's restructuring plan also would likely leave in place company Chairman and CEO Bob Pittman.

In addition to the majority stake, sources tell the Post that Franklin might ask iHeartMedia to issue new debt, perhaps as much as $1 billion, that would need to be paid first before equity holders could take any distributions or dividends.

On Thursday, iHeartMedia priced a $150 million bond offering that pays 8.75 percent interest so it can stay current with debt payments over the next several months.

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