GateHouse Media Inc., the owner of 97 newspapers and online publications, suspended its quarterly dividend and said it will use the savings to reduce debt.
The Fairport, New York-based company will also issue $11.5 million of preferred stock to a fund managed by an affiliate of Fortress Investment Group, the publisher's largest shareholder, GateHouse said today in a statement. The company has $1.22 billion of long-term debt, according to today's report.
GateHouse cut its quarterly dividend (GHS:US) to 20 cents from 40 cents in March after newspaper writedowns led to a fourth-quarter loss of $214.6 million. Rising paper prices and declining classified advertising are pressuring GateHouse to reduce expenses and free up cash.
The second-quarter net loss widened to $443.3 million, or $7.77 a share, from $2 million, or 5 cents, a year earlier. The loss reflected a $443 million writedown of assets, triggered by a drop in the shares.
Revenue rose 17 percent to $184.1 million from $158 million a year ago, GateHouse said.
GateHouse fell 5 cents to 64 cents at 4:15 p.m. in New York Stock Exchange composite trading (GHS:US). The shares have tumbled 93 percent this year.
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