McClatchy (MNI) Stock Climbs On Standstill Agreement

McClatchy MNI Stock News

McClatchy Co (NYSEAMERICAN: MNI) is soaring in the market today, gaining in multiples after announcing a Standstill Agreement with PBGC. In fact, the stock has already climbed more than 400% as the agreement seems to have triggered a short squeeze. Here’s the scoop:

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MNI Stock Up More Than 400% On Standstill Agreement

The news was issued via press release late yesterday. According to the release, McClatchy signed a Standstill Agreement with Pension Benefit Guarantee Company (PBGC). The agreement extends the current runway for negotiations with regard to a consensual restructuring with key shareholders.

Since mid-November of last year, MNI has been actively negotiating restructuring plans with just about all of its secured lenders and bondholders, as well as the PBGC. The goal of the negotiations is to address the future of its pension obligations and capital structure.

The goal of the negotiations is to come up with a plan that includes one or more deleveraging transactions. Part of this deleveraging plan will include allor some of the company’s Second Lien Term Loans and Third Lien Notes. In the release, the company said that these notes are secured by second and third liens on its assets.

As part of the negotiations, MNI said that it has entered into non-disclosure agreements with lenders holding about 87% of the company’s First Lien Notes and 100% of its Second Lien Term Loans and Third Lien Term Loans.

In the release, the company said that negotiations are not only ongoing, but have been productive. As part of the Standstill Agreement, PBGC has agreed not to move forward with any remedies available as a result of the company not making its scheduled pension contribution payments.

In a statement, Craig Forman, President and CEO at MNI, had the following to offer:

We want to acknowledge our lenders and the PBGC for working collaboratively and negotiating in good faith to reach a consensus on these important financial matters, which underpin McClatchy’s continuing commitment to publishing independent journalism in the public interest. We look forward to continuing to partner with these groups to reach an agreement that is in the best interests of our 24,000+ pension plan participants and other stakeholders, and positions McClatchy for the future. We remain focused on executing our strategy of digital transformation and producing strong, independent, local journalism that is essential to the 30 communities we serve.

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