Postmedia Network Canada Corp (PNCa.TO), the country’s biggest newspaper publisher, said on Thursday it had reached a deal with some bondholders that would reduce its debt by $307 million (US$236 million), as it posted a third-quarter loss.
Postmedia said it had reduced its first-lien obligations to $225 million and extended them by around four years to July 2021, while it had exchanged its second-lien notes for 98 percent of the company’s existing equity.
Postmedia also secured $110 million of new second-lien debt priced in U.S. dollars, due in mid-2023, that offers no cash interest for three years.
“This will put Postmedia on a stronger footing into the future, and allow us to continue to pursue our business strategy,” Postmedia Chief Executive Paul Godfrey said in a statement.
The company has voting shares for Canadian investors and non-voting ones for foreigners so it can receive the favourable tax treatment afforded to Canadian publishers.
It signed support deals with its biggest investors, including first-lien holder Canso Investment Counsel Inc, certain second-lien holders of around 80 percent of outstanding 12.5 percent notes due in mid-2018, and holders of around 75 percent of the company’s shares.
Postmedia launched a strategic review in April, looking to sell assets and restructure its heavy debt load as it struggles with falling print advertising revenues.
Postmedia’s stable of newspapers includes the National Post, Montreal Gazette, Calgary Herald, Ottawa Citizen and Sun tabloids in Toronto, Calgary, Edmonton, Ottawa and Winnipeg.
The company posted a loss of $23.7 million in the three months to the end of May, compared with a loss of $140.8 million a year earlier. Revenue rose 6.4 percent to $218.3 million.
(Additional reporting by Vishaka George in Bengaluru; Editing by Savio D’Souza and Richard Chang)
Photo courtesy of Reuters/Mark Blinch