More MG News

The Media General statement sounds like a "move along, nothing to see here" sort of tone.

If anybody is aware and a little bit sharp, it would be foolish not to pay attention to what is going on.

 

Presented without comment. Maybe Ragu can translate? Is this good or bad?

FOR IMMEDIATE RELEASE
Tuesday, March 20, 2012
Media General Announces Amended Credit Agreement; Opportunity to Extend the Maturity
RICHMOND, VA. -- Media General, Inc. (NYSE: MEG), a multimedia provider of broadcast television, digital media and print products, announced that the company has amended its existing bank credit agreement. The amendments include covenant modifications that will provide the company more flexibility to operate in the current uncertain economic environment. Additionally, the amended agreement provides for an extension of the maturity date of $363 million of bank debt from March 2013 to March 2015, in return for a partial pay down of amounts outstanding.

The trigger for the extension will be raising a minimum of $225 million from the issuance of new notes by May 25, 2012. Of the $225 million, a minimum of $190 million will be applied to pay down the outstanding term loan and an amount determined by formula will be set aside in a liquidity account. The company’s revolver is reduced to $45 million with no amount outstanding at this time. In addition to the term loan paydown, the revolver commitment will be correspondingly reduced if the liquidity account funding is increased by more than $15 million.

“We are pleased with the overall parameters of our new financing structure,” said Marshall N. Morton, president and chief executive officer. “While interest costs will be higher in 2012, our amended credit agreement will provide Media General with more flexibility to operate, as well as expanded opportunities to reduce total debt through asset sales and pursuit of further refinancing options. Media General will continue to focus on accelerating its digital strategy through expanding paid-content initiatives, seeking beneficial partnerships with other fast-growing online businesses, developing new technology and broadening our product offerings,” said Mr. Morton.

The company said it expects operating cash flow in 2012 will cover interest payments, capital expenditures of approximately $20 million and retirement plan contributions of approximately $13 million.

The amended bank term loan facility has an interest rate of LIBOR with a 1.5% floor plus a margin ranging from 5% to 7% (and commitment fees ranging from 2.25% to 2.50%), determined by the company’s leverage ratio, as defined in the agreement. In addition to this cash interest, the company will accrue payment-in-kind (PIK) interest of 1.5%. PIK interest increases the bank term loan outstanding, is accrued on outstanding balances and is payable in cash on amounts outstanding at loan maturity.

A copy of the new credit agreement will be available later today on the company’s Website www.mediageneral.com as an SEC Form 8-K filing posted to the Investor Relations section.

Media General plans to file its 2011 Annual Report on Form 10-K on March 22, 2012.

Bank of America served as administrative agent on the transaction, and the Peter J. Solomon Company served as strategic advisor. J.P. Morgan will advise Media General on the issuance of new notes.

Forward-Looking Statements
This news release contains forward-looking statements that are subject to various risks and uncertainties and should be understood in the context of the company’s publicly available reports filed with the Securities and Exchange Commission. Media General’s future performance could differ materially from its current expectations.

About Media General
Media General is a leading provider of news, information and entertainment across multiple media platforms, serving consumers and advertisers in strong local markets, primarily in the Southeastern United States. The company is transforming itself over time to a digital media model, while continuing to effectively manage its larger, cash producing broadcast television and print platforms. Media General’s operations are organized in five geographic market segments and a sixth segment that includes the company’s interactive advertising services
and certain other operations. The company’s operations include 18 network-affiliated television stations and their associated websites and 23 newspapers and their associated websites. Media General operates three digital media advertising services companies: Blockdot, a specialty digital agency; DealTaker.com, a shopping website; and NetInformer, a wireless marketing services provider.

 

I'm not Ragu but from what I can gather, it's a good thing.

 

A glorified way of saying we're doing a refi. Sounds like they pushed back the maturity date, but are paying down some. Didn't see anything earth-shattering.

 

Unless I'm missing something, this sounds like MG is preparing for a future outside of the newspaper business, not just looking to dump a few newspaper properties.

http://workitcville.com/2012/04/10/media-general-filing-sheds-light-future-post-newspaper-company/

 

I think you might be right Jake.

 

Too bad they couldn't have done this several years ago before they ran several good newspapers into the ground.

 

From reading the article and the earlier release, it seems like Media General is guaranteeing revenue from the 2012 events to pay lenders. Their problem may be that the revenues after 2012 from their broadcast properties would likely be lower in 2013. Also, you have to wonder if some of the papers would be upside down - the amount due to creditors would be greater than the value of the newspaper.

 

I think that if Media General tried to sell all it's media properties they would not be able to cover thier debt. And I think the banks said that if we force the company into bankruptcy we will not be able to collect all the money due us. So the banks are thinking they will try to charge a higher interest rate and extend the terms and hope for the best, rather than pay the legal fees from forcing Media General into bankruptcy court.

I am surprised that the bankers have not insisted properties be closed. This leads me to believe that all the properties contribute at least a little cash flow towards paying down the debt, including the Tampa Tribune.

And I am sure that Media General would like to sell some newspaper properties down to reduce debt if they received a favorible price. But the Philadelphia papers just sold for less than 60M. Given recent sales the MG papers are worth peanuts.

 

MG waited too late. They could've gotten much more had they sold say two years ago. They wouldn't and now they appear to be desperate.

 

"In briefing investors on first-quarter performance Wednesday, Media General executives said the company is making progress in its goal of switching to an all digital news and television broadcast company. ... Media General is moving 'expeditiously' through the process, [CEO Marshall] Morton said, because 'selling the newspapers makes sense for us.' "

http://www2.tbo.com/business/breaking-news/2012/apr/18/tribune-parents-sale-of-newspapers-advances-ar-394039/

 

Oh my.