Hollinger Misses Key Debt Payment

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By: Mark Fitzgerald

Conrad Black’s Hollinger Inc. said it did not make the interest payment due today on the $120 million in bonds — raising the possibility that the press baron could be forced to cede the “supervoting” shares that allows him to control the Chicago Sun-Times, The Daily Telegraph in London and other media properties owned by Hollinger International.

Under terms of the 11.875% senior secured notes due in 2011, Black’s supervoting shares would go to bondholders if Hollinger Inc. defaults. Hollinger owns a 72.4% voting interest and 30% equity interest in Hollinger International. The payment due is approximately $7.4 million.

In a statement issued at 4:30 p.m. EST Monday, Hollinger said that missing the payment “does not constitute an event of default under the indenture governing the senior secured notes unless such non-payment continues for a period of 30 days from the date such interest is due.”

The statement said Hollinger would “actively examine” its options to satisfy its obligations.

In the recent Delaware Chancery Court lawsuit brought by Hollinger International — which ended with the judge blocking Black’s proposed sale of Hollinger Inc. to the
Barclay brothers — Hollinger contended it did not have the money to make the payment. In his decision, Vice Chancellor Leo Strine suggested the parent company could easily get the money from Black personally or his holding company Ravelston Corp.

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