Felled by Economy, Drop in Ad Income, Affiliated Media Files for Bankruptcy
Newspaper publisher plans debt-for-equity swap in prepackaged restructuring
January 19, 2010
Affiliated Media Inc., the publisher of major daily newspapers such as The Denver Post and San Jose Mercury News, said it will file for Chapter 11 bankruptcy protection in Delaware's bankruptcy court.
The bankruptcy will be a pre-packaged restructuring and it comes as a result of a fall in advertising income as well as the general economic downturn, the company said.
The reorganization plan calls for senior lenders to swap debt for equity, and it would reduce the company's indebtedness by approximately $930 million to $165 million, the company said in a statement last week.
The company’s senior lenders hold approximately $590 million of debt, guaranteed by certain affiliates, and the company also owes an aggregate principal amount of about $326 million to holders of subordinated notes.
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