GateHouse Media preparing to file for bankruptcy

The long-expected bankruptcy of GateHouse Media is rapidly approaching.

Documents filed with Securities and Exchange Commission indicate the company has reached an agreement with its biggest debtholder, Newcastle Investment Corp. to take care of that debt with a Chapter 11 bankruptcy and reorganization. GateHouse owes Newcastle $626 million.

GateHouse Media owns the Carthage, Press, Neosho Daily News, Pittsburg Morning Sun, among its approximately 400 newspapers:

On September 4, 2013, Newcastle Investment Corp. (“NCT”) posted a presentation (the “Presentation”) on its website (www.newcastleinv.com) that includes certain information about GateHouse Media, Inc. (the “Company”). NCT disclosed that it owns approximately $626 million face value of the Company’s total indebtedness, or approximately 52%. NCT also disclosed, among other things, that it had entered into an agreement with the Company and certain other holders of the Company’s debt related to a potential restructuring of the Company pursuant to a prepackaged plan of reorganization under chapter 11 of title 11 of the United States Code. The Company intends to issue a separate report on Form 8-K regarding the agreement related to the potential restructuring.

As part of such Presentation, NCT disclosed financial projections for GateHouse’s post-restructuring operations for 2013—2016. For fiscal year 2013, the Company projects that it will achieve approximately $475 million in revenue and $73 million in As Adjusted EBITDA. For fiscal year 2014, the Company projects that it will achieve approximately $489 million in revenue, $70 million in As Adjusted EBITDA and $57 million in “funds from operations”, defined as GAAP net income plus depreciation and amortization after adjustments for permanent cash tax savings. For fiscal year 2015, the Company projects that it will achieve approximately $510 million in revenue, $80 million in As Adjusted EBITDA and $65 million in “funds from operations”. For fiscal year 2016 the Company projects that it will achieve approximately $522 million in revenue, $85 million in As Adjusted EBITDA and $68 million in “funds from operations”.