Newspaper publishing company Lee Enterprises Inc. said on Tuesday that it has refinanced $94 million worth of debt with Warren Buffett's Berkshire Hathaway Inc., avoiding an interest rate increase that would have gone into effect next year.
Lee owns 46 daily newspapers, including The Daily News, and owns a joint interest in four others.
As part of the debt financing deal, Lee added as collateral its 50 percent stake in TNI Partners, which publishes the Arizona Daily Star and azstarnet.com.
Lee said the refinancing reduces the interest to a fixed rate of 9 percent, down from 11.3 percent, and extends the maturity from December 2015 to April 2017. The interest rate was set to rise to 12.05 percent in January 2014 and to 12.8 percent in January 2015.
Lee said it is paying off debt ahead of schedule. Its debt stands at $893 million, the level that it predicted it would reach in September 2014 in its bankruptcy reorganization plan. Lee ended a brief stint under bankruptcy protection in January 2012. Its debt includes $624 million due in December 2015.
Lee Chairman and CEO Mary Junck said the refinancing will reduce the company's interest expense and allow it to repay debt faster. Junck is also chairman of The Associated Press.
Lee said it didn't pay any fees in the refinancing, which has already been approved by its other lenders. The deal is expected to close in early May.