MediaNews CEO Dean Singleton announced today that the company has entered into a debt restructuring agreement as part of Chapter 11 proceedings.
Affiliated Media Inc., the holding company for MediaNews, will have their debt load reduced from $930 million to $165 million. According to the Wall Street Journal, the company's value has been estimated at $200 million.
As part of the agreement, majority ownership of the company has been given to Bank of America and other debtholders. Singleton and MediaNews President Joseph Lodovic now control 20 percent of the company stock. The pair maintain control of all Class A shares however, enabling Singleton and Lodovic to elect a majority of the board of directors.
No restructuring of individual properties or newsrooms is planned, according to Singleton, who characterized the move as a blessing for the cash-strapped empire, and perhaps an opportunity to expand further.
“Current shareholders will be losing the value of their holdings. But we believe that adopting this plan will give us a far better platform from which to develop, grow and participate in the consolidation and re-invention of the newspaper industry.”
Friday, January 15, 2010
Bankruptcy leads to ownership change
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6 comments:
How is it they can pick a majority of the board and only control 20% of its value?
Singleton is the king of doublespeak he kinda reminds me of the Iraqi Information Minister.
Just believe the opposite of whatever he says and you'll have a better understanding of the truth.
No company with nearly 1 Billion in dept can be reduced to a 1/4 of that and still thrive.
Office will close, papers will be carbon copies of each other and there will be no expansion.
Now that they're weaseling out on all sorts of debt (incurred through their irresponsible management policies). Are they gonna get away with weaseling out of the settlement now too?
So does this mean that the settlement that the Guild and Vicki has bee fighting for the displaced workers and former workers has also been wiped free from MNG's plate since it filed for bankruptcy?
I haven't heard anything suggesting that the settlement is in jeopardy, but I'm forwarding the question to Vicki for confirmation.
In related news, the Guild is trying to get a seat on the Creditors Committee, to protect our rights during the bankruptcy proceedings. The settlement isn't one of the reasons they're seeking the position, but it would certainly be something they would address.
We will definitely post more information as soon as it's available.
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