Inquirer owner defers interest payment, continues talks with lenders

Philadelphia Media Holdings L.L.C., which owns the Inquirer, Daily News, and Philly.com, said yesterday it deferred an interest payment on its bank loans this week, as negotiations continue on a refinancing plan that includes $20 million in new cash from its owners.

"Unlike some companies in our industry, PMH has strong, positive cashflows, 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 by at least 15 percent, PMH said. The Inquirer reported last spring 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 papers in 2006. At the time, the papers were earning somewhat above $50 million a year. The loan agreement requires the company to earn higher profits 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.