Most Recent Articles In Memo PadMost Recent Articles In Memo Pad
AMI MISSES A PAYMENT: The clock is ticking on American Media Inc. as the company failed to make an interest payment worth approximately $20 million to bondholders last Saturday and now has 30 days (from Nov. 1) to make that payment or it will default on all of its debt due to a cross default provision in its debt agreements. AMI, which publishes Shape, The National Enquirer and Star, among others, said Tuesday it has sufficient cash to make the payment and David Pecker, chief executive officer, said: “We are in the midst of constructive discussions with lenders holding more than a majority of the borrowings under our credit facilities and bondholders holding more than a majority of each series of our bonds to achieve a financial restructuring of American Media that would include a significant deleveraging of American Media. Our board of directors and existing equity holders are fully supportive of these discussions and we are hopeful that these discussions will be successfully completed shortly.” On Tuesday, the New York Post reported that president and chief operating officer John Miller resigned.
Back in August, AMI said it was potentially refinancing its notes and giving bondholders the possibility of warrants for the company’s stock. The refinancing incorporated a combination of $250 million of senior notes due in 2013, $15.9 million of special senior subordinated discount notes due in 2013 and up to $340 million of mandatory, convertible senior subordinated discount notes, also set to mature in 2013. AMI set a deadline of Sept. 25 — a day that came and went without any decision or agreement with bondholders. — Amy Wicks