Tuesday, December 16, 2008

Debt Burdens Lee Enterprises

Lee Enterprises Inc., the publisher of the St. Louis Post-Dispatch and 48 smaller newspapers, disclosed Monday that it faced several potential default triggers on its debt, becoming the latest newspaper chain to struggle with borrowings made in headier days.

Lee remains profitable, but like many newspaper companies, the Davenport, Iowa, concern is saddled with debt that it took on to finance an acquisition. Lee borrowed more than $1.5 billion to buy larger publisher Pulitzer Inc. in 2005.

Lee said its auditors may issue a "going concern doubt," an opinion that the company may not be viable. Lee said such an opinion from auditors would put the company in violation of its debt terms, unless its lenders agree to a waiver.

Lee said the company is working with the lenders to waive possible violations of its debt terms, and is also attempting to extend or refinance $306 million of notes due next year. Lee said its lenders are open to working "toward acceptable solutions" to avoid default.

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