Gannett Announces Further Debt Reduction
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The decision by Gannett Co., Inc. to repurchase its 2026 Senior Notes at a discount indicates a strategic approach to debt management. By capitalizing on the opportunity to buy back debt below par value, the company effectively reduces its future interest obligations and overall debt burden. This can be seen as a positive signal to investors, as it suggests a proactive stance in strengthening the balance sheet.
Furthermore, the repurchase is accompanied by a waiver from lenders, which adjusts the amortization payment schedule. This aspect of the transaction provides immediate financial flexibility, allowing Gannett to allocate capital more efficiently in the short term. The commitment to repay a substantial amount of debt in 2024 through asset dispositions and improved cash flow points to a disciplined capital allocation strategy, which is essential for maintaining financial health and potentially enhancing shareholder value.
Analyzing the debt repurchase from a market perspective, Gannett's ability to negotiate a repurchase below par value may reflect market perceptions of the company's creditworthiness or a broader trend in the debt markets. It is also indicative of the company's negotiation leverage and the current conditions of the credit market. Investors often view such transactions as a sign of confidence from management in the company's future cash flows and its ability to meet debt obligations.
The impact on the bond market could be a tightening of Gannett's credit spreads, reflecting a decreased risk premium demanded by investors. However, the effect on the stock market is generally more nuanced, potentially leading to a positive re-rating of the company's equity if the market interprets this as part of a successful de-leveraging strategy.
From a broader market standpoint, Gannett's actions must be contextualized within the media industry's ongoing transformation. The industry faces challenges such as declining print revenue and the need to invest in digital platforms. Gannett's focus on debt reduction and improvement in capital structure is important for freeing up capital to invest in growth areas and to navigate the industry's volatility.
Investors and stakeholders should monitor the company's ability to generate free cash flow and manage non-strategic asset dispositions, as these are critical factors in its ability to meet the stated debt repayment goals. The communicated strategy reflects a prioritization of financial stability over aggressive expansion or dividend distribution, which may appeal to certain investor segments looking for conservative financial management in a turbulent industry.
"By working with our lenders, we are continuing to opportunistically take out senior notes below par value, and this latest repurchase builds upon the agreements announced in November and September of 2023," said Michael Reed, Chairman and Chief Executive Officer. "We expect debt reduction and improvement in our capital structure to remain our primary use of capital allocation, and as a result, we expect to repay at least
About Gannett
Gannett Co., Inc. (NYSE: GCI) is a diversified media company with expansive reach at the national and local level dedicated to empowering and enriching communities. We seek to inspire, inform, and connect audiences as a sustainable, growth focused media and digital marketing solutions company. We endeavor to deliver essential content, marketing solutions, and experiences for curated audiences, advertisers, consumers, and stakeholders by leveraging our diverse teams and suite of products to enrich the local communities and businesses we serve. Our current portfolio of trusted media brands includes the
Our website address is www.gannett.com. We use our website as a channel of distribution for important company information, including press releases and other news and presentations, which is accessible on the Investor Relations and News and Events subpages of our website.
Cautionary Statement Regarding Forward-Looking Statements
Certain items in this press release may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including, but not limited to, statements regarding our expectations, in terms of both amount and timing, with respect to debt repayment, the terms of our debt repayment, our capital structure, our capital allocation, our free cash flow, our strategy, and our ability to achieve our operating priorities. The Company makes no guarantees or assurances that sales of any of the real estate or other asset sales in negotiation will close. Words such as "expect(s)", “continue(s)", "believe(s)", "will", "remain(s)", and similar expressions are intended to identify such forward-looking statements. These statements are based on management’s current expectations and beliefs and are subject to a number of risks and uncertainties. These and other risks and uncertainties could cause actual results to differ materially from those described in the forward-looking statements, many of which are beyond our control. The Company can give no assurance its expectations will be attained. Accordingly, you should not place undue reliance on any forward-looking statements contained in this press release. For a discussion of some of the risks and important factors that could cause actual results to differ from such forward-looking statements, see the risks and other factors detailed from time to time in the Company’s most recent Annual Report on Form 10-K, our quarterly reports on Form 10-Q, and our other filings with the Securities and Exchange Commission. Furthermore, new risks and uncertainties emerge from time to time, and it is not possible for the Company to predict or assess the impact of every factor that may cause its actual results to differ from those contained in any forward-looking statements. Such forward-looking statements speak only as of the date of this press release. Except to the extent required by law, the Company expressly disclaims any obligation to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in the Company’s expectations with regard thereto or change in events, conditions or circumstances on which any statement is based.
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For investor inquiries, contact:
Matt Esposito
Investor Relations
703-854-3000
investors@gannett.com
For media inquiries, contact:
Lark-Marie Anton
Corporate Communications
646-906-4087
lark@gannett.com
Source: Gannett Co., Inc.
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