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American Media investors to convert $121.3 million notes due 2018
By Susanna Moon
Chicago, Aug. 18 – American Media, Inc. said its recent investors agreed to convert $121.3 million principal amount of second-lien notes due 2018 into equity.
The transaction will reduce the company’s balance sheet leverage by “over a full turn” and lower interest expense $12.4 million per year, according to a company press release.
The investors recently acquired all of issued and outstanding shares of the company’s common stock.
The company said its management also plans to “actively assess the capital markets in order to capitalize on AMI’s lower leverage profile with an eye towards lowering interest costs and further improving the company’s free cash flow” over the coming months, the release noted.
The company noted that the company’s leverage had been an issue over the past several years.
The company also said it has “taken efforts to minimize the disruption to their distribution network created by the bankruptcy filing of Source Interlink” and remains “hopeful that AMI’s newsstand magazines will recover their lost sales by year-end.”
The company’s ability to work with its investors “underscores our commitment to deleverage the balance sheet and focus on reducing the company’s interest expense, which allows us to execute an aggressive strategy to transform American Media into a premier lifestyle brands company,” David J. Pecker, chairman, president and chief executive officer of American Media, said in the press release.
“My team and I are already moving assertively to execute this strategy with growth capital.”
American Media is a New York-based publisher of celebrity journalism and health and fitness magazines.
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