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GateHouse Media Inc. says it is on the verge of a filing prepackaged bankruptcy.
The Perinton-based newspaper chain on Wednesday revealed in a filing with the Securities and Exchange Commission that it and its biggest debt holder, Newcastle Investment Corp., have struck an agreement calling for GateHouse to restructure through a prepackaged Chapter 11.
The GateHouse filing came after Newcastle, which holds $626 million of GateHouse’s $1.2 billion in debt, laid out details of the pact in an investor presentation describing its $87 million acquisition of Dow Jones Local Media Group from News Corp.
Newcastle plans to have GateHouse manage Local Media Group, which puts out 33 local publications in seven states and generated $162 million in revenues last year.
A publisher of weekly newspapers and shoppers in more than 20 states, GateHouse generated $489 million in 2012 revenue but has run in the red.
Newcastle predicts the restructured and recapitalized GateHouse would emerge with a value of $485 million consisting of $150 in million senior debt and equity of $335 million and that GateHouse’s revenues would drop to $475 million this year but rise to $522 million by 2016.
Gatehouse would offset shrinking print-media revenues with gains in digital advertising including gains from a new online marketing venture, Propel, Newcastle told investors.
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