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December 5, 2008 / Toby Dayton

Avista May Exit From Star Tribune Deal…

The Business Journal is reporting this afternoon that senior creditors are stepping in to take over ownership of the Minneapolis Star Tribune in a debt for equity swap that eliminates 100% of Avista’s ownership in the daily newspaper. Avista invested $100 million in the deal and financed the rest with $400 million of debt, the majority of which was provided by Credit Suisse. Avista has already written off 75% of their original investment, and given their abysmal track record, it was only a matter of time before lenders demanded that something happen along the lines of what is being reported. I am reminded, however, of the old adage that anything that ends up in the garage or basement after a spring cleaning is making nothing more than a temporary stay before it ends up in the dump.