Friday, April 11, 2008

Journal Register Co., owner of more than 300 newspapers, sees stock and debt ratings slide

The stock of the Journal Register Co., a Yardley, Pa.-based newspaper chain, has been falling for weeks. On Monday, the stock closed at 22 cents per share, slightly up from the day's low of 19 cents, reports The Associated Press.

As of yesterday afternoon, the stock was trading at 28 cents per share, and Moody Investors Service downgraded the company's debt rating "two notches deeper into junk territory late Thursday on concerns the publisher of the New Haven (Conn.) Register is losing too much top-line revenue to cover its repayment obligations," reports Mark Fitzgerald of Editor & Publisher.

Journal Register stock (NYSE: JRC) has been trading below $1 for the past month and is in danger of being de-listed. The company announced earlier this week that it might put itself for sale and that it had hired Lazard Freres & Co. LLC for financial advice. Fitzgerald writes that there are reports the company is considering filing for bankruptcy. (Read more)

Besides its flagship Register, the company owns 21 other daily newspapers and 310 non-daily publications in Connecticut, Massachusetts, Michigan, New Jersey, New York, Ohio and Pennsylvania. The Hartford Courant's Capitol Watch sees other signs of trouble. "When New Haven Register's longtime Capitol bureau chief, Gregory Hladky, was abruptly laid off exactly one month ago, some Capitol insiders said the already weak finances of the Journal Register Company must be worse than anyone realized," Christopher Keating writes, adding, "Hladky's position had once been considered safe by many because his articles from the Capitol appeared in a wide variety of the JRC's publications, including the weeklies." (Read more)

UPDATE, April 14: Alan Mutter explains in his Reflections of a Newsosaur blog that the company is "highly profitable" but is suffering from too much debt, largely from buying a chain of papers in the Detroit area.

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