(RTTNews) - Lee Enterprises (LEE) said it has secured a $50 million strategic equity investment, as the media company works to stabilize its finances and improve long-term performance.
The private placement values Lee's common stock at $3.25 per share and is led by investor David Hoffmann, who committed about $35 million. Existing shareholders are contributing the remaining $15 million. Hoffmann has also agreed to fully backstop the transaction, ensuring the company receives the full $50 million, subject to customary closing conditions and shareholder approval.
The equity raise is expected to trigger an amendment to Lee's existing credit facility, cutting the interest rate on roughly $455.5 million of long-term debt to 5% from 9% for the next five years. The company said the change would materially improve cash flow and reduce financial pressure.
As part of the deal, Hoffmann is expected to become chair of the board.
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