Lee Enterprises, parent of the Journal Times, is between a rock and a hard place.
On Monday Lee announced it will delay filing its annual report until Dec. 29, while it seeks waivers from lenders. The newspaper chain owes approximately $1.3 billion from its 2005 purchase of Pulitzer newspapers, including the St. Louis Post-Dispatch.
Lee said it expects to make another $180 million write-down to equity, which would trigger the minimum net worth covenant in an agreement related to $306 million of its debt. Without a waiver, Lee would be in default on the debt -- and that would create a default condition in other debt.
Lee said that its accounting firm, KPMG, said that without the waiver it would have to include a paragraph in the annual report about the company's ability "to continue as a going concern." That, too, would trigger yet another default under Lee's bank credit agreement.
Lee's stock closed today at 39 cents per share, down from $49 per share at its high at the time of the Pulitzer purchase. The company's market cap, once over $2 billion, is down to $17.5 million.
Lee's statement is HERE.
Besides the Journal Times, Lee owns 48 other daily newspapers and 300 weeklies and specialty publications.