GateHouse owes creditors $1.2 billion

Via the Turner Report:

It’s the darling of the newspaper industry at the moment because of its acquisition strategy, but a prospectus filed Friday with the Securities and Exchange Commission indicates GateHouse Media … is nearly $1.2 billion in debt.

And from that prospectus:

Our substantial indebtedness could adversely affect our financial health in the following ways:

-a substantial portion of our cash flow from operations must be dedicated to the payment of interest on our outstanding indebtedness, thereby reducing the funds available to us for other purposes, including our ability to pay dividends on our common stock;

-our substantial degree of leverage could make us more vulnerable in the event of a downturn in general economic conditions or other adverse events in our business;

-our ability to obtain additional financing for working capital, capital expenditures, acquisitions or general corporate purposes may be impaired, limiting our ability to maintain the value of our assets and operations; and

-there would be a material and adverse effect on our business and financial condition if we are unable to service our indebtedness or obtain additional financing, as needed.

I’ll leave it to someone who knows more about this wort of thing than I to pontificate on whether this company is doing great, is a house of cards or is somewhere in the middle. I dunno, but $1.2 billion seems like a staggering amount of money to owe someone when your business model seems to be to buy up all of one sort of business in an area and squeeze nickles out of them.

GateHouse Media,prospectus