Newcastle Investment Corp., which owns just over half of GateHouse Media Inc.’s debt,
announced today (Sept. 4, 2013) that it has reached an agreement with other creditors to
potentially restructure GateHouse’s $1.2 billion debt.
The announcement comes on the heels of the news that Newcastle bought the Dow Jones
Local Media Group from News Corp for $82 million.
GateHouse Media owns the Augusta Daily Gazette, Andover American and El Dorado Times.
GateHouse Media will manage the Local Media Group newspapers, which include 33
local publications, including eight daily and 15 weekly newspapers, in seven states.
GateHouse is an affiliate of Fortress Investment Group, Newcastle’s manager. Newcastle
is a trust that focuses on investments and management of real estate and other debt, as
well as senior housing.
GateHouse is one of the largest publishers of locally based print and online media in the
United States with a portfolio of products that includes over 400 community publications
and approximately 350 related websites.
GateHouse’s debt restructuring would be under a chapter 11 prepackaged plan.
Newcastle expects to convert its debt into stock, and other creditors will have the option
to convert debt into stock or cash.
Newcastle also will consider separating GateHouse and Local Media Group into a
publicly traded company, called New Media, which has an expected equity value of $390
million. Newcastle would own 59 percent of New Media.
New Media could invest $1 billion to acquire local media assets over three years.
Earlier this year, GateHouse Media disclosed that it was evaluating capital structure
alternatives in advance of its debt being due in August 2014.