Hollinger Inc.: 'Telegraph' Money Not Collateral -- But Not Black's Either

By: E&P Staff Hollinger Inc. said yesterday that the $39.4 million it will get from the sale of London's Daily Telegraph does not need to be put aside as collateral for its big debt, as it had said last month. But in an interview published in The Globe and Mail of Toronto today, Hollinger Inc.'s chairman, Gordon Walker, reiterated that the money will not be paid out to controlling stakeholder Conrad Black or other stockholders.

Walker told the newspaper that the money is likely to be used for general corporate purposes.

The Hollinger Inc. windfall is part of a special dividend declared by its subsidiary, the publishing company Hollinger International, to disburse some of the proceeds from last summer's $1.3 billion sale of the Telegraph and related publications. Hollinger International said it may declare another special dividend later in the year to disburse more of the proceeds to shareholders.

Black, who is the target of lawsuits by the U.S. Securities and Exchange Commission and Hollinger International, is the controlling stockholder of Hollinger Inc., which in turn controls Hollinger International, publisher of the Chicago Sun-Times and other papers.

Hollinger Inc. is to get $39,432,307 on Jan. 18 as its part of the special dividend. In December, it announced that the money would have to be held by a trustee as collateral for $93 million in senior secured debt. In its statement Monday, the company said that it had determined that none of the money needs to be held as collateral.


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