NEW YORK (AP) — GateHouse Media Inc. says that it will restructure its $1.2 billion debt in a prepackaged Chapter 11 bankruptcy filing.
Newcastle Investment Corp., which owns more than half of GateHouse’s debt, then plans to combine GateHouse’s 400 community newspapers and 350 related websites with the 33 Dow Jones Local Media publications that it recently bought from News Corp. for $87 million. The combined operations would form a new publicly traded company called New Media.
Benefiting from growing digital revenue and cost cuts, New Media could invest $1 billion over three years to purchase more newspapers and shopping publications at discounted prices, Newcastle said in a presentation to investors on Wednesday.
Both GateHouse Media and Newcastle Investment are affiliates of Fortress Investment Group LLC, which specializes in buying troubled businesses.