NEW YORK, Dec 31 (Reuters) - Lee Enterprises (LEE.N) got some extra time to work out an agreement to pay its debt, even as auditors questioned the U.S. newspaper publisher’s ability to continue operating, a violation of its borrowing terms.
In its annual report, filed on Wednesday with the U.S. Securities and Exchange Commission, Lee said it does not have enough cash flow to meet its requirements for 2009 operations.
Lee is profitable, but owes millions in debt related to its $1.5 billion purchase of newspaper chain Pulitzer Inc in 2005. The company in its filing said it also does not have enough cash to meet requirements for paying back its Pulitzer notes.
Lee’s earlier this month warned that its auditors might conclude that the company would have trouble continuing as a going concern.
The company now must reach an agreement with lenders by mid-January on new terms, and has another deadline to meet after that in late March.
It also said that it has received notice that its stock has fallen below the minimum requirement for listing on the New York Stock Exchange.
The publisher of the St. Louis Post-Dispatch is the latest U.S. newspaper publisher to teeter on the brink of default as newspaper advertising revenue falls.
Lee said it has $142.5 million in principal payments due under its credit agreement in 2009, and plans to use money from a revolving credit facility to pay some of it. It plans to use the rest of it to meet principal payments of $166.3 million in 2010. The facility now has $162 million available.
The company said it has $306 million in Pulitzer notes that it must extend or refinance.
Reporting by Robert MacMillan; Editing by Bernard Orr