Nation’s largest newspaper publisher to refinance debt with Apollo Global Management
McLean-based Gannett Co. Inc., the largest newspaper publisher in the U.S., announced Tuesday it has refinanced approximately $500 million in debt to more quickly repay on outstanding loans.
Gannett announced in early April that it was negotiating with its vendors, creditors and pension regulators in order to preserve the company’s liquidity. It was noticeably not on the Fortune 1000 list released in mid-May.
The company refinanced the loan with New York-based private equity firm Apollo Global Management.
“Working collaboratively, we crafted a creative approach to address Gannett’s desire to rapidly strengthen its balance sheet,” Robert Givone, Apollo partner and co-head of opportunistic credit, said in a statement. “The refinancing is indicative of the types of capital solutions that Apollo is uniquely situated to provide to great companies.”
Gannett Chairman and CEO Michael Reed says the refinancing’s benefits include generating savings and extending the debt maturity by three years.
“Since putting the term loan in place in November 2019, we have repaid over $175 million to date, and we expect to repay an additional $100 million in the coming months,” Reed said in a statement.
The refinanced portion of Gannett’s debt has a 6% interest rate and a 2027 maturation date. It was originally at 11.5% and due in 2024. The company will still owe Apollo nearly $1.12 billion.
“Pro forma for these repayments, the outstanding term loan will be approximately $1 billion, which we believe we can refinance on attractive terms by the end of the first half of 2021,” Reed said in a statement. “As we improve the company’s capital structure, we are also seeing continued improvement in our revenue trends, which we expect will drive strong fourth quarter results.”
The refinancing was unanimously approved by Gannett’s board of directors. Greenhill & Co. LLC and Cravath, Swaine & Moore LLP advised Gannett during the transaction.
Gannett also announced mass layoffs, furlough and pay cuts in late March due to the COVID-19 pandemic. The owner of USA Today, Gannett has a portfolio of 261 local daily newspapers in 46 states and Guam, including the Arizona Republic, the Des Moines Register and the Burlington Free Press.
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