Prisa Said to Target $4 Billion Refinancing Pact This MonthManuel Baigorri and Esteban Duarte
Promotora de Informaciones SA is seeking to reach an agreement with creditors to refinance more than 3 billion euros ($4 billion) in debt as early as this week, according to two people familiar with the matter.
Spain’s biggest media company and publisher of El Pais newspaper is scheduled to meet with lenders tomorrow, with definitive signing of an accord to take place by the end of this month, the people said, asking not to be named because the deliberations are private. Prisa still needs the backing of some international and Spanish banks that hold about 15 percent of the company’s debt, the people said.
While a unanimous agreement from creditors is Prisa’s preferred option, an accord with the backing of a majority of lenders would also be possible subject to court approval, the people said. Prisa obtained a 350 million-euro credit line this month from funds including Centerbridge Capital Partners LLC, Knighthead Capital Management LLC and Silver Point Capital LP to cover some financing needs as they are supportive of the refinancing plan, two people familiar with the matter said.
Refinancing the debt, due in 2014 and 2015, would give Prisa time to sell assets as Spain struggles to reverse a decline in advertising spending. Prisa has called a shareholders meeting for Dec. 10 in Madrid to approve the issuance of warrants as part of the refinancing as it seeks to extend debt maturities to five or six years.
A Prisa spokeswoman in Madrid said there is more work to be done on the refinancing, which should be ready by Dec. 10. She declined to comment on the creditor meeting this week. A representative for Greenwich, Connecticut-based Silver Point declined to comment, while spokesmen for Knighthead and Centerbridge, both based in New York, weren’t immediately available to comment.
Besides El Pais, the best-selling Spanish newspaper, Prisa also publishes business newspaper Cinco Dias, magazines, and owns television and radio stations as well as the Santillana education division. The company also owns a 17 percent stake in Mediaset Espana Comunicacion SA.
Prisa fell 3.7 percent to 33.5 euro cents at 4:41 p.m. in Madrid. The stock climbed 48 percent this year through Nov. 15, after three consecutive annual declines, partly on optimism over a refinancing deal. The company chaired by Juan Luis Cebrian has a market value of 382 million euros.
Still, advertising spending in Spain, which has contracted by about half since 2007, will probably shrink by more than 11 percent this year, according to estimates by researcher Zenith Vigia. Prisa reported net losses in seven out of the past eight quarters.