But the agreement comes at a price. The Bee's owner will have to pay a higher interest rate. Its line of credit has been scaled back. And it could be prohibited from paying any shareholder dividends under certain circumstances, although that ban wouldn't take effect until next spring.
The deal is in response to a significant slide in revenue and profit, a trend that's humbling newspaper publishers everywhere. Sacramento-based McClatchy carries the added burden of about $2 billion in debt remaining from its 2006 takeover of Knight Ridder Inc. The debt includes $1.175 billion in bank loans and available lines of credit.
Sunday, September 28, 2008
KC Star owner renegotiates bank loans
McClatchy Newspapers, owner of the Kansas City Star, has some added flexibility in paying back its loans, but that news still indicates hard times are going to continue for the company. From an article in McClatchy's Sacramento Bee: