Newspaper company chokes on debt levels
Source: Agencies |
January 24, 2010, Sunday
|
Print Edition
Print Edition
THE owner of 54 US daily newspapers has filed for bankruptcy protection, joining the procession of publishers choking on too much debt.
The filing on Friday by Affiliated Media Inc, the holding company of MediaNews Group, was expected.
The privately held company had said on January 15 that it would seek to reorganize its finances in bankruptcy court.
MediaNews, based in Denver, said its newspapers, which include The Denver Post and the San Jose Mercury News, and 8,700 employees won't be affected during the bankruptcy proceedings.
Affiliated Media worked with its major lenders and shareholders to hammer out a plan aimed at shortening the company's stay in federal bankruptcy court in Delaware. It hopes to emerge from bankruptcy protection within a month or two.
The plan calls for Affiliated Media's debt to fall to US$179 million from US$930 million, according to a person familiar with some of the documents.
In exchange for this US$751 million concession, a group of lenders led by Bank of America become the company's majority owners with 88 percent of the stock. The remaining 12 percent goes to MediaNews' management team, which is led by William Dean Singleton, who is also chairman of The Associated Press.
Executives will receive warrants that eventually could boost their combined stakes to 20 percent.
Singleton, who will continue to run the company, held a roughly 30 percent stake in Affiliated, but Richard Scudder, who co-founded it with Singleton in 1985, will relinquish his interests.
The filing on Friday by Affiliated Media Inc, the holding company of MediaNews Group, was expected.
The privately held company had said on January 15 that it would seek to reorganize its finances in bankruptcy court.
MediaNews, based in Denver, said its newspapers, which include The Denver Post and the San Jose Mercury News, and 8,700 employees won't be affected during the bankruptcy proceedings.
Affiliated Media worked with its major lenders and shareholders to hammer out a plan aimed at shortening the company's stay in federal bankruptcy court in Delaware. It hopes to emerge from bankruptcy protection within a month or two.
The plan calls for Affiliated Media's debt to fall to US$179 million from US$930 million, according to a person familiar with some of the documents.
In exchange for this US$751 million concession, a group of lenders led by Bank of America become the company's majority owners with 88 percent of the stock. The remaining 12 percent goes to MediaNews' management team, which is led by William Dean Singleton, who is also chairman of The Associated Press.
Executives will receive warrants that eventually could boost their combined stakes to 20 percent.
Singleton, who will continue to run the company, held a roughly 30 percent stake in Affiliated, but Richard Scudder, who co-founded it with Singleton in 1985, will relinquish his interests.
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