By: Mark Fitzgerald Conrad Black's Hollinger Inc., the holding company that controls the publisher of the Chicago Sun-Times and other U.S. and Canadian newspapers, bolstered its cash on hand to approximately $14 million for day-to-day operations, largely by the private placement of $15 million in new notes that bear an annual interest rate of 11.855% and will mature in March 2011.
In its latest biweekly status report, Hollinger said holders of $78 million in senior notes approved the placement. The company is in technical default with the noteholders because it has been unable to file annual financial statement.
Hollinger says it cannot file the statements until it gets data from its Hollinger International holding, the company that removed Black as chairman and accuses him and other executives of "looting" the publishing group through improper fees and payments. Hollinger said it has been told by Hollinger International that the latter company cannot file its own financial statements until it has reviewed the 513-page report from a special committee investigating the allegations against Black and others. Black announced last Friday he intends to sue the special committee and other Holliner International executives for libel.
Hollinger said based on the stock price for its holdings of Hollinger International stock, "there is currently in excess of $269.6 million aggregate collateral securing the $78 million principal amount of the senior notes outstanding and the $15 million principal amount of the second priority notes outstanding."
Hollinger's principal asset is a 68% voting interest and 18.2% equity stake in Hollinger International Inc.
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