Lee Enterprises moves to complete refinancing plan
Saturday, December 3, 2011
DAVENPORT, Iowa (AP) — The publisher of the St. Louis Post-Dispatch and more than 40 other newspapers is close to completing a complex debt refinancing plan that includes a prepackaged Chapter 11 bankruptcy filing.
Lee Enterprises Inc. disclosed details of the plan on Friday. The prepackaged Chapter 11 filing, which Lee expects to initiate in about 10 days, is designed to force uncooperative lenders to go along with a refinancing arrangement that Lee reached with a majority of its lenders in September.
CEO Mary Junck described the refinancing plan as welcome news because it will give the company more time to repay its debt while protecting the interests of shareholders. Junck is on The Associated Press’ board of directors.
The proposed refinancing covers about $1 billion in debt. Most of the money would have been due in April, but the refinancing will extend the scheduled repayments into 2015 and 2017. Most of Lee’s debt is a result of its $1.46 billion acquisition of Pulitzer Inc. in 2005.
The refinancing “will keep Lee on solid financial footing as we continue reshaping our company for long-term growth by expanding our digital platforms, building audiences, driving sales and improving our balance sheet,” Junck wrote in a letter to Lee’s shareholders and employees.
By gaining the support of all but a few lenders before its filing, Lee believes it will be able to emerge from the bankruptcy process within 60 days. The company said there wouldn’t be any impact on its operations during the process.
Lee’s stock rose 10 cents to 63 cents after the company disclosed its plan.