Newspaper publisher McClatchy files for bankruptcy


McClatchy Co. newspaper publisher applied for chapter 11 bankruptcy protection as he seeks to restructure more than $ 700 million in debt.

The company publishes 30 newspapers, including The Miami Herald, The Kansas City Star, and The Sacramento Bee.

Pending court approval, 60% of its debt would be wiped out and control of the company would be handed over to McClatchy’s largest creditor, the hedge fund Chatham Asset Management.

Chatham Asset Management also holds a majority stake in National Enquirer and Postmedia, the largest Canadian newspaper chain.

“When local media suffer in the face of industry challenges, communities suffer: polarization increases, civic relations unravel and borrowing costs rise for local governments,” said Chief Executive Officer Craig Forman. . “We move forward with speed and focus for the benefit of all of our stakeholders and communities. “

McClatchy said he received $ 50 million in debtor-in-debt financing from Encina Business Credit and would continue to operate the newspapers.

In court records he said he has twice reached agreements on strategic transactions that would have reduced its leverage, but it was “unable to reach acceptable financing terms, leaving the transactions unenforceable”.

McClatchy said he is starting the bankruptcy process following active restructuring negotiations with the Pension Benefit Guaranty Corporation to sort out his future pension obligations. He expects fourth-quarter revenue of $ 183.9 million, down 14% year-on-year. He expects 2019 revenue to be down 12.1% year-over-year, its sixth consecutive year of decline.

McClatchy expects to retire from the New York Stock Exchange and go private.

“While this is obviously a sad step after 163 years of family control, McClatchy remains a strong operating company committed to critical local news and information,” said Kevin McClatchy, president of the company. “While we try to avoid this step, there is no doubt that the size of our 75-year-old pension plan – with 10 retirees for every active employee – reflects another economic era.”

Justin Sullivan / Getty Images

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