FCC Okays Boost in Foreign Ownership Cap in iHeartMedia

RADIO ONLINE | Monday, November 9, 2020

iHeartMedia

The FCC's Media Bureau ruled in favor of a petition for declaratory ruling filed by iHeartMedia on July 25 to permit iHM to exceed the 25% benchmark for foreign investment. In a SEC filing, iHeartMedia said under reorganization and emergence from proceedings of Chapter 11 Bankruptcy Code on May 1, that it entered into a Special Warrant Agreement with Computershare Inc. and Computershare Trust Company. The petition's approval by the FCC permits up to 100% of the company's voting stock to be owned by non-U.S. individuals and entities.

Under the Special Warrant Agreement, the iHeartMedia plans, within two business days of November 5, to notify the holders of Special Warrants of the Declaratory Ruling and the commencement of an exchange process. The company has agreed to effect an exchange of all or a portion of the outstanding Special Warrants into Class A common stock or Class B common stock on a date to be determined.

In accordance with the Special Warrant Agreement, the date will be 40 business days after the date the Exchange Notice is sent to the holders of Special Warrants. iHM has agreed to waive the exercise price for exchanging the Special Warrants in the exchange following the Declaratory Ruling and will not receive any proceeds from that exchange.

As of November 5, Special Warrants to purchase 75,753,316 shares of the company's Class A common stock or Class B common stock remained outstanding. Between the issuance of the Exchange Notice and the Exchange Date, holders of the Special Warrants will not be permitted to transfer or exchange their Special Warrants. On the Exchange Date, the company will issue up to 75,753,316 shares of the company's Class A common stock or Class B common stock, less any Special Warrants that are exchanged prior to the issuance of the Exchange Notice, any Special Warrants for which the holder elects not to exchange into Class A common stock or Class B common stock at this time, and any Special Warrants held by holders that do not submit election and certification forms in connection with the exchange.

Shares of the company's Class B common stock are not publicly traded, but they are convertible on a one-for-one basis into Class A common stock. The shares of Class A common stock and Class B common stock to be issued under the Exchange Notice will be issued in reliance upon exemptions from registration requirements of the Bankruptcy Code.