Summary
- iHeartMedia, Inc. is a global media and entertainment company doing radio, digital, outdoor, mobile, live events, and other forms of entertainment.
- On the cash flow front, investors should appreciate that the CFO increased from -$491 million in 2017 to $966 million in 2018.
- Using a ratio of 6x to 7x EBITDA, the total enterprise value could be equal to $9 billion to $11 billion.
- The company expects to use the proceeds to pay its debt.
- The financial debt is larger than $5.2 billion. The liabilities subject to compromise represent debt reclassified in 2018.
As iHeartMedia (OTCPK:IHRTQ) expects to emerge from Chapter 11 in the second quarter of 2019, the company is organizing an IPO. Reporting positive cash flow from operations of $966 million in 2018 and after reclassifying its long-term debt, the recent financial situation is a bit better than that in 2016 and 2017. Having said this, the financial risk is still very significant. Using a ratio of 6x to 7x EBITDA, the total enterprise value could be equal to $9 billion to $11 billion. Taking into account this figure, the market capitalization should not increase a lot when the iHeartMedia emerges from Chapter 11.
