Lee Enterprises, the North County Times’ publicly traded parent company, says it is getting close to defaulting on some of its $1.5 billion in debt.
The Iowa-based company says its independent auditors may soon issue an opinion citing its concern that the company will be able to continue. Such an opinion would trigger a debt default.
The Wall Street Journal offers more information in a story today:
Lee Enterprises Inc., the publisher of the St. Louis Post-Dispatch and 48 smaller newspapers, disclosed Monday that it faced several potential default triggers on its debt, becoming the latest newspaper chain to struggle with borrowings made in headier days.
Lee remains profitable, but like many newspaper companies, the Davenport, Iowa, concern is saddled with debt that it took on to finance an acquisition. Lee borrowed more than $1.5 billion to buy larger publisher Pulitzer Inc. in 2005.
Mary Junck, Lee’s CEO, said in a news release that she remains optimistic about the company’s future. “Even in this recession, Lee continues to generate substantial cash flow,” she said, “and we continue to believe that Lee will emerge strong when all the national economic turbulence ends.”