Shares of Sun-Times Media Group, Inc. (PinkSheets: SUTMQ, SUTMQ message board) are still stuck at a penny although the bankruptcy court Judge approved a bid from a private investor group by the name of STMG Holdings, LLC on Thursday to rescue the majority interests of the cash-strapped media empire from liquidation. The newspaper company, which has been publishing a string of over 50 titles and corresponding websites under bankruptcy protection since March, had a near death experience until the eve of the hearing when the last four of the 16 unions voted to amend their contracts to pave way for the encouraging ruling.The James Tyree-led consortium agreed to buy the loss-making company for $5 million in cash, while assuming about $22 million in liabilities in a transaction that is expected to close at the end of the month. There were no other bidders who submitted offers for the acquisition of the media empire, a situation which could have prompted the judge to order an auction of the assets. STMG’s approved offer includes the freezing of the company’s pension plans, and security against mass job cuts.
The media group’s biggest creditor is the Internal Revenue Service, which is owed more than $600 million in taxes dating back to the days when the company was known as Hollinger International Inc., and led by media mogul, Conrad Black, who is now serving a six-year sentence for misappropriation of corporate funds. When it filed for Chapter 11 Bankruptcy protection in March, the group had $479 million of assets and $801 million of debt on its books.
Most recent reports have indicate that the publisher has been burning an average of $250,000 in cash per week, amid a downturn in advertising revenues, due to stiff completion posed by rival media companies that have gained ground in audience share. Sun-Times shares were trading for less than a penny in the morning session on Monday.
Reference:
http://www.thesuntimesgroup.com/
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