SACRAMENTO (CN) – Second-quarter losses of nearly $300 million have put newspaper conglomerate McClatchy Co. on the edge of delisting from the New York Stock Exchange, for falling below $1 a share.
McClatchy’s longtime flagships have been the Sacramento Bee and other Bee papers in California. Its purchase of Knight-Ridder in 2006, for $4.5 billion plus stock, loaded McClatchy with debt and forced it to cut jobs – 1,600 of them 2009, 15 percent of its work force at the time.
Knight-Ridder, the second-largest newspaper chain in the country in 2006, was more than twice the size of McClatchy. McClatchy said at the time that it planned to sell 12 of the 32 Knight-Ridder papers and keep 20 of them, including the largest ones, the Miami Herald, Kansas City Star, Fort Worth Star-Telegram and Charlotte Observer.
All U.S. newspapers have struggled since the Internet devastated their Classified ad sections and the availability of free online news pounded subscriptions.
McClatchy stock sold at $18 in 1995, when it bought the News & Observer Co., and rose to a high of $74 in March 2005. It fell below $7 in April 2014, below $3 in January this year, and to 82 cents on Aug. 3.
The New York Stock Exchange then warned that it could be delisted for falling below its $1 per share “continued listing standard,” which averages share prices over 30 days.
On Tuesday, McClatchy announced it had spent $23 million to buy its own debt, in addition to a $15 million share buyback it announced last week. McClatchy shares closed at 87 cents Monday and at 98 cents Tuesday.
It said in its statement that its remaining $996 million in debt is “manageable,” and that the next payment date, in 2017, is for $60 million.
McClatchy, which still owns newspapers in 28 markets, has six months to regain compliance with the NYSE’s continued listing standard.McClatchy faced a similar delisting warning in 2009, but was able to increase its share price and remain on the NYSE.
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