Forget all the talk about privatization. What's more likely, he says, is a refinancing deal that could "dilute or even wipe out" what's left of McClatchy's equity value, which Tuesday afternoon stood at $298.4 million.
McClatchy is saddled with some $2.1 billion in debt from its ill-times acquisition of Knight Ridder, and while it is covering interest payments easily now, its cash flow is slipping just like many other newspaper companies.
Tuesday, September 9, 2008
Refinancing deal ahead for McClatchy?
Fritz has Martin Peers' take on McClatchy privatization rumors:
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5 comments:
The looks a little off-the-wall to me. Would there really be an upswell of buyers for MNI equity in this market, with all the talk of dying newspapers and bloated executive staffs. MNI is carrying a 20 percent dividend at its current price, yet just hovers around $3, and declines a few cents a day. So they float new preferred equity at a higher dividend rate to make it attractive? And which NY broker is going to sell it? They could try, but it just might not sell and they would be forced to withdraw the offer. This company is really in dire straits, and considering more equity strikes me as truly ridiculous.
Alan Mutter has speculated about deep-pockets buyers who don't necessarily care about the bottom line. (Saudi money, etc.)
How do they refinance a fixer upper...with a sub-prime loan?
No credit...bad credit...no problem...maybe a Saudi loan shark.
You gotta be kidding me. MNI already stretched trying to make their credit bills, so loading up with more in terms of preferred stock (I guess) doesn't pass the laugh factor. Wall Street is no fool, so you think they will buy securities to allow high-flying Pruitt to keep his jet, his salary, and a huge corps of executives. No. Slim down first, get rid of the corporate bloat, put your house in order, sell off assets, then come to the market with some new stock to float. The business model here is broken. No investor, not even Saudi, will buy into it.
Saudi money? They aren't rubes. They do have financial advisers and they look for the long-term. MNI has no long-term.
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