By: E&P Staff
The owners of the Star Tribune in Minneapolis have opted not to pay interest on the paper’s second-tier debt.
Neal St. Anthony reported. in the Star Tribune that Avista Capital Partners declined to make a quarterly interest payment on $96 million in debt, which is now in default. Instead the company wants to work out a restructuring plan with The Blackstone Group. Avista retained the financial advisors in May.
Chris Harte, CEO of the Star Tribune, told St. Anthony, “If we can restructure this debt, we still have a very viable [business].”
Avista paid the interest payment on its senior debt of $400 million.
Harte said that EBITDA is “down dramatically” and that the newspaper has not be able to cut operating costs fast enough. The plan is restructure the debt with senior creditors.
St. Anthony reported that Avista’s senior debt has traded among banks for as little as 56 cents on the dollar and the second-tier debt has traded for as little as a 10 cents on the dollar.