Papers' owner defers payment
Philadelphia Media Holdings L.L.C., which owns The Inquirer, Daily News, and Philly.com, said yesterday that it deferred an interest payment on its bank loans this week, as negotiations continued on a refinancing plan that includes $20 million in new cash from its owners.
Philadelphia Media Holdings L.L.C., which owns The Inquirer, Daily News, and Philly.com, said yesterday that it deferred an interest payment on its bank loans this week, as negotiations continued on a refinancing plan that includes $20 million in new cash from its owners.
"Unlike some companies in our industry, PMH has strong, positive cash flows, which have remained steady year over year," the company said in a statement. "We remain hopeful that we can quickly finish the terms of the new plan with our lenders."
PMH proposed the plan in August. A deal would allow PMH to complete the planned sale of its 400 N. Broad St. headquarters and reduce the senior debt load at least 15 percent, PMH said. The Inquirer reported in the spring that the building would be sold to and leased back from Patriot Equities L.P., of Wayne, but that deal has not yet closed.
PMH borrowed $295 million, plus a $50 million revolving credit, from Citizens Bank and other banks when it bought the newspapers in 2006. At the time, the papers were earning more than $50 million a year. The loan agreement requires the company to earn higher profit each year, or it will be in technical default.
PMH issued the statement after the missed payment was reported by Standard & Poor's in an investors' newsletter.
