A federal judge yesterday gave the thumbs up to a plan that will allow Lee Enterprises (NYSE: LEE) to exit bankruptcy later this month with a new debt structure. The plan will not disrupt the rights of share holders, employees and most creditors.
The plan by Lee, which publishes dozens of papers in the west and mid-west, is a “pre-packaged bankruptcy” which means its trip through court will be quick and relatively painless.
The plan will extend the maturity date for a category of notes worth $127 million until 2015 while restructuring a total of almost $1 billion in long term debt. Unlike most bankruptcies, shareholders and unsecured creditors will come through the process unscathed when Lee exits Chapter 11 on January 30.
“This is the favorable outcome we fully expected, and it provides Lee with a nearly four-year runway to continue improving our balance sheet,” said Mary Junck, chairman and chief executive officer in a statement. “The refinancing, along with our ongoing strong cash flow, will keep Lee on solid financial footing [..] Because of our intensive sales culture and evolving array of products, Lee has outpaced the industry in advertising revenue performance for 33 quarters in a row. Even in a challenging economy, more than 80% percent of adults in our larger markets read or use our print and digital products each week, including two-thirds of 18- to 29-year-olds.”
More details about the restructuring can be found in a company press release.