Lee Enterprises reaches agreement with lenders for extension of its maturities to 2015, 2017, says deal will help maintain solid financial foundation in future
September 8, 2011
– Lee Enterprises, Incorporated (NYSE: LEE), a leading print and digital provider of local news, information and advertising in 53 markets, has reached agreement with a significant majority of the holders of its revolving credit and term loan facilities to provide for extension of maturities to 2015 and 2017.
“This is excellent news for Lee stockholders and employees,” said Mary Junck, Lee chairman and chief executive officer. “It will allow us to refinance our bank debt on good terms and keep Lee on solid financial footing as we continue to expand our digital platforms, build audiences, drive revenue performance and improve our balance sheet.”
Lee’s current credit facility will be amended and extended beyond its current maturity of April 2012 in a structure of first and second lien debt. The first lien consists of a term loan of $689.5 million, along with a $40 million revolving credit facility that is not expected to be drawn at closing. The second lien consists of a $175 million term loan.
Among provisions of the arrangements:
Carl Schmidt, Lee vice president, chief financial officer and treasurer, said the method for implementing the agreement is expected to be determined within the next few weeks. “Getting the support of more than 90 percent of our creditors is a significant milestone and allows us to turn our attention to refinancing the Pulitzer Notes. Assuming successful completion of that financing, we expect to implement the transactions out of court if we can get lender support up to 95 percent. Otherwise we will seek to implement the transactions through a favorable prepackaged Chapter 11 filing. Such a filing, if necessary, would be expected to have no adverse impact on company operations, employees, vendors, advertisers or subscribers. Subject to dilution resulting from the issuance of the new shares, current stockholders’ interests in the equity of the company would be preserved.”
The Blackstone Group is serving as Lee’s financial adviser for the transactions.
In a letter to stockholders and employees, Junck said:
“The refinancing will remove a cloud that has obscured Lee’s formidable strengths in our markets, how far we have advanced against the challenge of the national economy, and how successfully we are seizing emerging opportunities in the changing media landscape:
Lee Enterprises is a leading provider of local news and information, and a major platform for advertising, in its markets, with 49 daily newspapers and a joint interest in four others, rapidly growing digital products and nearly 300 specialty publications in 23 states. Lee's newspapers have circulation of 1.4 million daily and 1.7 million Sunday, reaching nearly four million readers in print alone. Lee's digital sites attracted 21.6 million unique visitors in June 2011. Lee's markets include St. Louis, Mo.; Lincoln, Neb.; Madison, Wis.; Davenport, Iowa; Billings, Mont.; Bloomington, Ill.; and Tucson, Ariz. Lee Common Stock is traded on the New York Stock Exchange under the symbol LEE. For more information about Lee, please visit www.lee.net.