Historic City News learned Friday that Morris Publishing Group, LLC has agreed to the terms of a proposed restructuring agreement with the holders of over seventy-five percent of its outstanding senior subordinated notes.
The last two semi-annual interest payments to note holders, totaling $19.4 million, were due February 1, 2009 and August 3, 2009 — and remain unpaid. Once again, bankers find themselves extending the forbearance period until October 16, 2009 for collection of the overdue interest payments.
In a twist this week, however, Morris Publishing’s senior bank group only agreed to extend until October 2, 2009 the waiver of “cross defaults” arising from the overdue interest payments; signaling increasing pressure for Morris to make those late payments.
$138.75 million in existing senior secured indebtedness to Morris Publishing is owed by affiliates of Morris Publishing. This week’s proposal would cause those Morris affiliates to make some capital contributions and repay some indebtedness and to cancel $110 million of the existing debt.
Morris has hopes that, at that time, and if the proposed restructuring is approved, the holders of the $278.5 million in outstanding notes would exchange their existing notes for $100 million of new “second lien” secured notes.
The restructuring agreement is subject to the final negotiation and execution of the definitive legal documentation and other closing conditions.
Morris Publishing Group, LLC is a privately held media company based in Augusta, Ga. Morris Publishing currently owns and operates 13 daily newspapers including The St. Augustine Record and Florida Times-Union.
Photo credits: © 2009 Historic City News photographer Kerry McGuire