Banks have taken control of American Consolidated Media from its Australian parent company.
ACM publishes 15 dailies and 44 weeklies in nine states, including The Daily Tribune in Hibbing, Minn., and The Athens (Ohio) Messenger.
Sydney-based Southern Cross Media Group Ltd., formerly known as Macquarie Media Group, had warned last fall that the chain was going to be in violation of loan covenants that would give the lenders the right to take control. At the time, Southern Cross said it did not intend to make any cash infusions to the Dallas-based publishing company.
Under terms announced by Southern Cross, the lenders now have a 90% equity stake and 100% ownership stake in ACM. Southern Cross said it retained a 10% non-voting equity stake.
ACM, Southern Cross added, has “executed a restructuring agreement with its lenders.” The company did not elaborate on terms of the agreement or identify the lenders. The online news site Ashland (Wisc.) Current, in a posting from its managing editor, Andrew Broman, and publisher, Claudia Broman, reported the bank group included the Australia and New Zealand Banking Group, CIT Group, GE Commercial Finance, Macquarie Bank of Australia, National Australia Bank, and the Royal Bank of Canada.
Last fall, Southern Cross said ACM was cash flow positive and meeting all interest payments on the bank facility. But it said it expected the chain, which it acquired in 2007, was going to violate loan covenants related to the permissible amount of debt compared to EBITDA.
Southern Cross at the time said it did not expect to be affected by the ACM default. It said the chain contributes about 17% of MMG's overall operating EBITDA, and "is considered a non-core asset."