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Postmedia plans consent bid for 8¼% notes due 2017 to issue add-on
By Susanna Moon
Chicago, Oct. 6 – Postmedia Network Canada Corp. said it will begin a consent solicitation for its 8¼% senior secured notes due 2017 as part of its planned acquisition of a stable of newspapers.
As part of the planned funding for the purchase, the company will issue another C$140 million of its 8¼% senior secured notes due 2017.
The company also plans a rights offering of subscription receipts for proceeds of C$186 million less net proceeds from real estate sales of up to C$50 million prior to the launch of the rights offering, according to a company press release.
An existing noteholder, who owns more than 50% of the 8¼% notes, has entered into a subscription agreement to purchase subscription receipts representing the entire amount of the additional notes, the release noted.
Closing of the subscription receipt offering is slated for late October after completion of a consent solicitation to approve amendments to the notes indenture needed for the incremental funding of the additional notes, the company said.
The amendments must be approved by holders of a majority of outstanding notes but, with the subscriber being a holder of a majority of the notes, the approval is assured, the company said.
Proceeds will be used to finance the company’s planned acquisition. The company entered into a definitive agreement with Quebecor Media Inc. to purchase Sun Media Corp.’s stable of 175 English language newspapers, specialty publications and digital properties.
The subscription receipts will bear interest at the same rate as the notes and will automatically be exchanged for the additional notes on completion of the acquisition, for no additional payment.
The Don Mills, Ont., holding company publishes paid English-language daily newspapers through its subsidiary, Postmedia Network Inc.
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