The private equity firms that own Clear Channel Communications may be so desperate to restructure the company’s debt that they’ve gone begging to the same banks they sued two years ago, the New York Post reports.
Two unnamed sources quoted in the Post piece say that Bain Capital and THL Partners, which bought Clear Channel in 2007, have asked Citigroup, Credit Suisse, Deutsche Bank, Morgan Stanley, RBS and Wachovia for more loans to keep Clear Channel afloat.
The PE firms deny the story, according to Radio Business Report. “The New York Post story about Clear Channel today is dead wrong, and we told them so,” a spokesperson told RBR.
The background: When Bain and THL wanted to buy Clear Channel in 2006, times were good. By the time the sale was to close, credit had dried up and the banks backing the buyout wanted the investors to walk away. The firms instead sued the banksthe same banks Clear Channel is now reportedly asking for help.
What does this all mean? RBR theorizes that the owners will “pull out all of the stops to avoid a default,” while the Post predicts the investors will allow the company to go bankrupt and then “repossess a piece of the business on the cheap [rather] than invest more in a company that is well underwater.”
Clear Channel employs approximately 18,000 people worldwide.