Friday, December 19, 2008

Times-News owner is in financial trouble

Lee Enterprises seeks waivers from creditors to avoid default


By EXPRESS STAFF

Newspaper conglomerate Lee Enterprises Inc., publisher of the Times-News in Twin Falls, is in danger of defaulting on debts, the company indicated in a news release earlier this week.

Lee Enterprises notified the federal Securities and Exchange Commission on Monday that it plans to delay the filing of its annual earnings report until Dec. 29 to gain time to negotiate waivers with its lenders.

One set of loans linked to the St. Louis Post-Dispatch newspaper, totaling $306 million, is identified as being particularly troublesome, the news release states. Without a waiver from creditors, the loan could go into default, in turn causing adverse effects on other aspects of the company's finances, the news release states.

Lee officials said the company's auditor indicated it needed to provide documentation showing it could meet its debt obligations. Otherwise, the company must explain its financial viability in its annual report.

Mary Junck, chairwoman and chief executive officer, said: "As the economy has continued to worsen, Lee is actively engaged in discussions with the note holders to extend or renew the (notes) as soon as possible, and we are simultaneously working to obtain the necessary waivers under our various debt agreements. Although the credit markets remain very difficult, lenders have shown a willingness to work toward acceptable solutions to help us avoid violating performance conditions in our debt agreements.

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"Even in this recession, Lee continues to generate substantial cash flow, and we continue to believe that Lee will emerge strong when all the national economic turbulence ends."

Lee Enterprises operates 49 daily newspapers and has a joint interest in four others, plus more than 300 weekly newspapers. It is a former owner of the Wood River Journal, which was based in Hailey. It sold the Journal last spring to the Post Co., publisher of the Post Register in Idaho Falls. Citing financial woes, the Post Co. ceased publication of the Journal in October and sold the newspaper's name and assets to Express Publishing, publisher of the Idaho Mountain Express.




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