With no explanation, Lee Enterprises, Inc. canceled a special shareholders meeting seeking approval of a "rights offering" intended to raise $50 million for working capital and company operations.
In a three-sentence filing with the Securities and Exchange Commission (SEC) posted Thursday, Dec. 18, the company stated it "decided to cancel the special meeting" set for the next day, Dec. 19, and had "withdrawn from consideration the proposal set forth in the Proxy Statement."
The company – owner of some 70 print and online publications including the Quad City Times and Dispatch/Argus – announced Nov. 13 it was planning to seek approval of the unusual "rights offering" as a way to pay for its "digital transformation" and lower the interest rate on its $450 million debt.
According to the company, if the full $50 million was raised by the offering, it had an agreement with its lender, BH Finance, to lower the interest on the debt to 5 percent from the current 9 percent annually for a period of five years.
That interest rate reduction would have saved the company $18 million a year, or a total of $90 over five years. BH Finance is a subsidiary of Berkshire Hathaway, which is owned by Warren Buffett.
CLICK HERE to download the "rights offering" announcement from Lee of November 10.
CLICK HERE to view the Lee Enterprise post on SEC site on the shareholder meeting cancellation.
