El Pais Owner Said to Plan $3.8 Billion Debt Restructuring

Promotora de Informaciones SA, the publisher of El Pais newspaper, wants to reorganize the terms of about 2.9 billion euros ($3.8 billion) of debt, according to a person familiar with the matter.

Prisa, as Spain’s biggest media company is known, plans to propose terms of the restructuring to lenders as soon as next month, the person said, asking not to be identified because the deliberations are private.

The unprofitable media company is reopening talks as about 1.28 billion euros of loans near an initial maturity date in March 2014, according to its latest annual report. Shares of Prisa have fallen about 40 percent in the past year as newspaper readership and advertising decline and the euro-area’s fourth-largest economy endures a six-year economic slump and rising unemployment.

“The company needs this restructuring and the market was waiting for this deal to happen but we still need to see the results of the agreement and conditions imposed by banks,” Pedro Oliveira, an analyst at Banco BPI in Porto, Portugal, said by telephone today.

An official at Madrid-based Prisa declined to comment when contacted by Bloomberg News today.

Prisa shares were unchanged at 21.5 euro cents at 2:07 p.m. in Madrid, valuing the company at 218.6 million euros.

Reducing Debt

Prisa said earlier this month it was still holding talks with several companies to sell literature business Alfaguara as well as other assets as it seeks to reduce debt. Any deal will be announced after a binding agreement is reached, the company said. Prisa’s net loss was 255 million euros last year, compared with 451 million euros a year earlier.

The Spanish advertising market is poised to fall about 11 percent compared with a year earlier, said Eduardo Madinaveitia, a director for media research at Zenith Media in Madrid. It’s now at levels seen in the mid-1990s, he said.

“We’ve gone through six difficult years already and the outlook for advertising still remains very challenging after the first quarter,” Madinaveitia said in a phone interview last week. “April was also horrible. It’s just a complete disaster.”

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