Gannett Announces Closing of Refinancing Transactions and Early Settlement of Exchange Offer and Consent Solicitation

Gannett Co., Inc. (“Gannett”, “we”, “our”, or the “Company”) (NYSE: GCI) announced today the initial closing of its previously announced debt refinancing transactions that extend our debt maturities and significantly reduce future dilution from the Company’s 6.000% Senior Secured Convertible Notes due 2027 (the “2027 Convertible Notes”).

“We are pleased to announce the successful closing of our refinancing transactions, which mark an important step in strengthening Gannett's capital structure,” said Michael Reed, Chairman and Chief Executive Officer. “This achievement extends our debt maturities, reduces future dilution from the 2027 Convertible Notes, and provides us with increased financial flexibility. We believe these actions create a strong foundation for continued execution of our strategy and position us to unlock further value for our shareholders as we drive growth and transformation in the years ahead.”

Senior Notes Exchange Offer and Consent Solicitation

On October 15, 2024 (the “Early Settlement Date”), Gannett and its wholly-owned subsidiary, Gannett Holdings LLC (“Gannett Holdings”), completed the early settlement of their previously announced (a) offer to exchange (the “Exchange Offer”) any and all outstanding 6.000% Senior Secured Notes due 2026 of Gannett Holdings, as set forth in the table below (the “Senior Secured Notes”), for, at the election of each holder of Senior Secured Notes, either (i) (A) first lien term loans (the “Term Loans”) under the Amended Credit Agreement (as defined below) and (B) an upfront fee equal to 1.5% of such Term Loans (together with the Term Loans, the “Loan Option Consideration”); or (ii) cash (the “Cash Option Consideration”), and (b) the related consent solicitation being made by Gannett and Gannett Holdings (the “Consent Solicitation”) to (i) eliminate substantially all of the restrictive covenants contained in the indenture governing the Senior Secured Notes, dated as of October 15, 2021 (the “Indenture”), (ii) eliminate certain of the default provisions contained in the Indenture and (iii) amend certain related provisions to conform for such eliminations.

The table below shows the principal amount of Senior Secured Notes accepted for exchange as of 5:00 p.m., New York City time, on October 10, 2024, and the principal amount of Term Loans and cash delivered on the Early Settlement Date for the Senior Secured Notes accepted for exchange (not including accrued and unpaid interest on such Senior Secured Notes or cash in lieu of fractional portions of Term Loans):

 

 

 

 

Senior Secured Notes Tendered as of the Early Tender Date

Senior Secured Notes Exchanged

CUSIP/ISIN

Aggregate Principal Amount Outstanding

Consideration(1)

Principal Amount

Percentage

6.000% Senior Secured Notes due 2026

36474G AA3 / US36474GAA31U3 647GAA2 /USU3647GAA23

$278,541,000

Loan Option: $1,000 in Term Loans and 1.5% upfront fee

 

$40,428,000

14.51%

Cash Option: $1,000 cash

 

$234,253,000

84.10%

Total

$274,681,000

98.61%

_____________________

(1)

The Loan Option Consideration or Cash Option Consideration, as applicable, were paid for each $1,000 principal amount of Senior Secured Notes validly tendered and accepted for exchange.

Following early settlement of the Exchange Offer, Gannett Holdings had outstanding $3,860,000 aggregate principal amount of Senior Secured Notes.

The Exchange Offer and Consent Solicitation are being made pursuant to the terms and subject to the conditions set forth in a confidential offer to exchange and consent solicitation statement dated September 26, 2024 (the “Offer to Exchange and Consent Solicitation Statement”), copies of which were previously distributed to eligible holders of the Senior Secured Notes.

The Exchange Offer and Consent Solicitation will expire at 5:00 p.m., New York City time, on October 25, 2024, unless such date is extended (the “Expiration Time”). The final settlement date will be promptly after the Expiration Time and is expected to be the third business day after the Expiration Time (the “Final Settlement Date”). The Final Settlement Date may change without notice.

The complete terms and conditions of the Exchange Offer and Consent Solicitation are described in the Offer to Exchange and Consent Solicitation Statement, a copy of which may be obtained by contacting Epiq Corporate Restructuring, LLC, the exchange agent and information agent in connection with the Exchange Offer and Consent Solicitation, at [phone] or [e-mail], with reference to “Gannett” in the subject line.

Convertible Notes Exchange

On October 15, 2024, the Company completed privately negotiated transactions with certain holders of Gannett’s 2027 Convertible Notes, including, as previously announced, funds, accounts or other clients managed by Apollo Capital Management, L.P. or its affiliates, pursuant to which it (i) repurchased a total of $223,613,869 in aggregate principal amount of 2027 Convertible Notes for cash at a rate of $1,110 per $1,000 principal amount of 2027 Convertible Notes and (ii) exchanged a total of $223,613,869 in aggregate principal amount of 2027 Convertible Notes for new 6.000% Senior Secured Convertible Notes due 2031 (such repurchase and exchange, collectively, the “Convertible Notes Exchange”). The $447,227,737 in aggregate principal amount of 2027 Convertible Notes exchanged pursuant to the Convertible Notes Exchange was subsequently canceled. Following such cancellation, Gannett had outstanding $38,058,263 aggregate principal amount of 2027 Convertible Notes. Gannett was advised on the transactions by Citizens JMP Securities, LLC.

Credit Facility

In addition, on October 15, 2024, the Company entered into an Amendment and Restatement Agreement (the “Amendment and Restatement Agreement”) among the Company, as a guarantor, Gannett Holdings, as the borrower (in such capacity, the “Borrower”), certain subsidiaries of the Borrower as guarantors, the lenders party thereto, Citibank, N.A., as the existing collateral agent and administrative agent for the lenders, and Apollo Administrative Agency, LLC, as the successor collateral agent and administrative agent for the lenders, which amended and restated the First Lien Credit Agreement dated as of October 15, 2021 (the “Existing Credit Agreement”; the Existing Credit Agreement as amended and restated by the Amendment and Restatement Agreement, the “Amended Credit Agreement”) among the Company, as a guarantor, the Borrower, certain subsidiaries of the Borrower as guarantors, the lenders from time to time party thereto and Citibank, N.A., as collateral agent and administrative agent for the lenders. The Amended Credit Agreement provides for a five-year senior secured term loan facility in an aggregate principal amount not to exceed $900 million (the “Amended Credit Facility”), comprised of an initial Term Loan funded (including as Loan Option Consideration in exchange for Senior Secured Notes) on the Early Settlement Date in an aggregate principal amount of $850,428,000 and delayed-draw Term Loan commitments in an aggregate amount of $49,572,000.

The proceeds of the initial Term Loan under the Amended Credit Facility were applied on the Early Settlement Date to prepay the term loans outstanding under the Existing Credit Agreement on the Early Settlement Date, to repurchase the Senior Secured Notes that were tendered by the holders thereof on or prior to the Early Settlement Date pursuant to the Exchange Offer, to repurchase the 2027 Convertible Notes that were exchanged by the holders thereof on or prior to October 15, 2024 pursuant to the Convertible Notes Exchange and to pay fees, costs and expenses in connection with the foregoing. The proceeds of any delayed-draw Term Loans under the Amended Credit Facility that are funded after the Early Settlement Date may be used by the Borrower to repurchase, redeem, defease or otherwise discharge Senior Secured Notes or 2027 Convertible Notes that are outstanding after the Early Settlement Date and to pay fees and expenses in connection with the foregoing.

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 USA TODAY NETWORK, comprised of the national publication, USA TODAY, and local media organizations in the United States, and Newsquest, a wholly-owned subsidiary operating in the United Kingdom. Our digital marketing solutions brand, LocaliQ, uses innovation and software to enable small and medium-sized businesses to grow, and USA TODAY NETWORK Ventures, our events division, creates impactful consumer engagements, promotions, and races.

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.

This press release does not constitute an offer to sell or purchase, or a solicitation of an offer to sell or purchase, or the solicitation of tenders or consents with respect to, any security. No offer, solicitation, purchase or sale will be made in any jurisdiction in which such an offer, solicitation, or sale would be unlawful. The Exchange Offer and Consent Solicitation are being made solely pursuant to the Offer to Exchange and Consent Solicitation Statement and only to such persons and in such jurisdictions as is permitted under applicable law.

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, among others, statements regarding our ability to refinance our debt facilities, maturity of debt, note repurchases, exchanges and redemptions, uses of proceeds, expectations (including timing) with respect to the Exchange Offer and Consent Solicitation, the Convertible Notes Exchange, the Amended Credit Agreement, availability of future financing and interest expense. Words and phrases such as “may”, “will”, “to be” 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 regarding the Exchange Offer and Consent Solicitation, the Convertible Notes Exchange, the Amended Credit Agreement or any other proposed financing or liability management transactions, or otherwise, 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 section entitled “Risk Factors” in the confidential offer to exchange and consent solicitation statement dated September 26, 2024 and the risks and other factors detailed in the Company’s 2023 Annual Report on Form 10-K and from time to time in 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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