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Signal not affected by Morris Publishing Group plans for Chapter 11 filing

NOT The Signal's parent company

Posted: January 14, 2010 2:59 p.m.
Updated: January 14, 2010 2:59 p.m.
 
The Santa Clarita Valley Signal will not be affected by a Chapter 11 bankruptcy protection filing planned by Morris Publishing Group.

Augusta, Ga.-based Morris Publishing Group owns 13 daily newspapers including The Augusta Chronicle, Savannah Morning News and Florida Times-Union of Jacksonville.

The Santa Clarita Valley Signal is owned by a completely separate company, the Savannah, Ga.-based Morris Multimedia.

Morris Publishing Group is a company founded by William Morris, while Morris Multimedia is owned by his brother, Charles Hill Morris Sr., and the latter's family.

"The only tie between the two companies is the family connection," said Signal Publisher Ian Lamont. "There is no business connection between what are two very different companies, and there is no impact to The Signal."

The Augusta-based Morris Publishing Group said in a news release it would file a "prepackaged" plan, preapproved by a majority of its creditors, in federal bankruptcy court by Tuesday. The plan seeks to slash Morris Publishing's debt of $415 million by nearly 70 percent.

"We're pleased that so many of our noteholders agreed to support this move to get Morris Publishing on more solid financial ground," said Sandra Sternberg, Morris Publishing Group spokeswoman.

As newspaper profits have dwindled industrywide from the economic recession, on top of readers lost to online media, privately owned Morris Publishing Group has been saddled with debt mostly accumulated from its acquisition of newspapers in the 1990s.

With advertising revenues shrinking, the company has been unable to pay $19.4 million in interest on unsecured bond debt of $278.5 million that was due in two semiannual payments in February and August last year.

Morris Publishing Group says it will ask a bankruptcy judge to approve a bond exchange that would trade the company's existing unsecured debt for $100 million in new bonds - erasing $178.5 million owed to creditors.

The company has worked since October to get creditors to support the restructuring plan, but failed by the deadline earlier this week to get the near-unanimous approval required to settle its debt out of court.

Morris Publishing Group says it plans to further reduce its debt, after the bond exchange is approved, by paying back $110 million of $136 million in debt owed to banks using funds generated by the company's sale of a majority stake in its billboard advertising business in October.

The company's creditors include JPMorgan Chase Bank, Bank of New York, SunTrust Bank, Wachovia Bank, Bank of America, General Electric Capital Corporation, Allied Irish Banks, RBS Citizens, Comerica Bank, First Tennessee Bank, Webster Bank, Sumitomo Mitsui Banking Corporation, and Mizuho Corporate Bank.

Morris Publishing Group is a former subsidiary of Morris Communications LLC. A reorganization in January 2009 left Morris Communications as an affiliate of Morris Publishing Group, but no longer its parent company.

The Morris newspaper chain started in the 1940s when William S. Morris Jr. purchased The Augusta Chronicle, where he began working as a bookkeeper in 1929. His grandson, William S. Morris IV, is Morris Publishing's CEO.

The company has newspapers in eight states - Alaska, Arkansas, Florida, Georgia, Kansas, Minnesota, South Carolina and Texas - as well as more than 60 non-daily newspapers and magazines. The Florida Times-Union is the company's largest newspaper, followed by The Augusta Chronicle and the Savannah Morning News.

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