Lee Enterprises' plan effective Jan. 30, credit facility restructured

By Lisa Kerner

Charlotte, N.C., Jan. 30 - Lee Enterprises, Inc.'s reorganization plan became effective as of Jan. 30 as expected, according to a Monday filing with the U.S. Bankruptcy Court for the District of Delaware.

The court confirmed the company's pre-packaged reorganization plan on Jan. 23.

Lee Enterprises also announced it completed the refinancing to extend the maturities of its borrowings to December 2015 and April 2017. The refinancing includes the issue of 6.74 million shares of Lee common stock, amounting to dilution of about 13% in the base of outstanding shares.

Implementation of the refinancing required a voluntary, pre-packaged Chapter 11 process, the release said.

As previously reported, the debtors' credit facility will be amended and extended beyond its current maturity of April 2012 in a structure of first- and second-lien debt.

The first-lien debt consists of a $689.5 million term loan as well as a new $40 million revolving credit facility that is not expected to be drawn at closing, both of which mature in December 2015.

The second-lien debt consists of a $175 million term loan maturing in April 2017.

Interest on the first-lien term loan will be Libor plus 625 basis points with a 1.25% Libor floor, and interest on the second-lien term loan will be 15%.

Lenders under the second-lien term loan will share in the issuance of 6.74 million shares of Lee's common stock.

Creditor treatment

As previously reported, treatment of creditors under the plan includes the following:

• Holders of pre-bankruptcy credit agreement claims will receive a share of a new first-lien term loan, provided that credit agreement claimants that made a conversion election will receive a second-lien share of the second-lien loan and 15% of the reorganized company's common stock;

• Holders of PD LLC notes claims will receive new notes, a Lee closing date payment and any accrued interest;

• Holders of general unsecured claims, including trade claims, will be paid in full in cash either as they come due or on the plan effective date; and

• Equity interests and the Herald claim will be reinstated.

Lee is a Davenport, Iowa-based print and digital provider of local news, information and advertising. Its Chapter 11 case number is 11-13918.

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