McClatchy Co. has received a bid from senior debt holders to acquire it, the company said Thursday in an update on its voluntary Chapter 11 bankruptcy protection filing.
Two of McClatchy's senior secured lenders, Chatham Asset Management and Brigade Capital Management, submitted a non-binding term sheet to acquire the publisher in a credit bid of first-lien debt of $263 million, plus $30 million in new money and other terms.
"Importantly, under terms of the proposed credit bid, McClatchy would remain one company, which will emerge from Chapter 11 having resolved its legacy debt and pension obligations, just as it set out to at the start of this process," the company said in a statement. It added that the process "will provide certainty to qualified pension plan participants and to the wider group of employees and stakeholders who benefit from a restructured McClatchy."
The company's board of directors will evaluate the term sheet against other proposals.
McClatchy has asked the Pension Benefit Guaranty Corp. to take over its qualified defined benefit plan that was closed to new participants in 2009. It has $1.39 billion in assets including about $580 million of voluntary contributions made by McClatchy. As of March 31, the plan was underfunded by $535 million. The company has proposed settling its pension liabilities by paying the PBGC $3.3 million annually for 10 years and giving it 3% of equity ownership.
A PBGC spokesman said that mediation talks are ongoing.