Newspaper publisher McClatchy Co. (MNI) has filed for Chapter 11 bankruptcy protection along with its 53 wholly owned subsidiaries. The company said operations will continue as usual at its 30 newsrooms as it undergoes restructuring and plans to emerge from bankruptcy in the next few months.

McClatchy owns several local news outlets, including the Miami Herald, Kansas City Star, The Charlotte Observer, The News & Observer in Raleigh, North Carolina, and The Star-Telegram in Fort Worth, Texas.

McClatchy said it has secured $50 million in debtor-in-possession financing from Encina Business Credit, which combined with its operating cash flow, will allow it to continue operating all of its local news outlets, it said.

"McClatchy's Plan provides a resolution to legacy debt and pension obligations while maximizing outcomes for customers and other stakeholders," Craig Forman, president and CEO at McClatchy said in a statement. "When local media suffers in the face of industry challenges, communities suffer: polarization grows, civic connections fray and borrowing costs rise for local governments. We are moving with speed and focus to benefit all our stakeholders and our communities."

The company has grown its digital-only subscription base by nearly 50% year-over-year with digital accounting for 40% of its revenues. McClatchy has over 200,000 digital-only subscribers, and over 500,000 paid digital customer relationships.

McClatchy has reduced its operating expenses by 23.3% or $186.9 million over the last three years, paying down debt of about $153.5 million. The company’s pension plan at the time of filing is estimated at $1.393 billion, with $580 million in voluntary contributions made by McClatchy.

As part of its restructuring plan, McClatchy has asked to maintain employee wages and benefits as well as its commitments to stakeholders. The company expects its creditors and vendors to be unaffected by the Chapter 11 filing with some delays in payment that McClatchy anticipates will be resolved when it emerges from bankruptcy.

McClatchy announced its restructuring plans in November 2019. The company expects to emerge as a private business going forward, removing its listing from the NYSE.

Total revenues for Q4 are expected to be $183.9 million, down 14% from fourth quarter 2018, with advertising revenues of $89.7 million and audience revenues of $80 million. Adjusted EBITDA is expected to be $33.3 million.

The company’s full-year guidance is anticipated to have revenues of $709.5 million, down 12.1% from 2018 with advertising revenues at $337.1 million and audience revenues of $321.8 million. Adjusted EBITDA is expected to be $98.2 million for the year.

Shares of McClatchy stock were up 9.43% as of 10:51 a.m. EST on Thursday.

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