The settlement of a shareholder suit was agreed upon by and between Clear Channel Outdoor Holdings Inc and the claimant. The suit sought to rescind an alleged improper loan that the company had entered into for its financially strapped parent Clear Channel Communications Inc.
According to the allegations in the suit, the loan to the parent firm 'so significantly' depleted Clear Channel Outdoor's cash liquidity that it was forced to undertake an onerous loan in the amountof US$2 billion to fund its special dividend. Included as parties to the suit are the owners of Clear Channel Communications, private equity firms Bain Capital LLC and Thomas H Lee Partners LLC.
The settlement agreement involves payment of US$200 million under a revolving promissory note from its parent company and then pay a special dividend in the same amount from the proceeds of the repayment.
In mid day trading, Clear Channel Outdoor's shares remained at US$7.38 per share on the New York Stock Exchange.
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