It’s hard to know quite what to make of the financial status of Black Press, the company controlled by Canadian publisher David Black which also happens to own the Honolulu Star-Advertiser, MidWeek, and the recently purchased The Garden Island newspaper. Most evidence, though, points to rather healthy prospects as his media empire continues to grow and he launches even more ambitious projects.
On the one hand, Torstar Corp., publisher of the Toronto Star and owner of a 20% stake in Black Press, reported its quarterly earnings and did not include results from holdings in Black’s empire.
Torstar did not record its share of Black Press’s results in the fourth quarter of 2012 as Torstar’s carrying value in Black Press had previously been reduced to nil.
In November 2012, the rating agency S&P lowered its rating on Black Press debt.
— We are lowering our long-term corporate credit rating on Victoria,
B.C.-based Black Press Ltd. to ‘B-‘ from ‘B’ based on our view of the
company’s ongoing organic revenue and profit declines, as well as refinancing
— At the same time, we are revising our recovery rating on the company’s
senior secured bank debt to ‘1’ from ‘2’, while affirming our ‘B+’ issue-level
rating on the debt, reflecting our view of improved recovery prospects given
Black Press’ continued repayment of the debt.
— The negative outlook reflects our expectation that we could lower the
ratings in the near term if the company fails to address its refinancing risk.
On the other hand, Black’s buying spree continues. In addition to purchasing the Kauai newspaper, he also just added three other publications:
Sound Publishing, a subsidiary of Black Press of Surrey, Canada, completed its purchase of The Everett Herald and two other publications from The Washington Post Co. on Monday, the Herald said.
Terms of the deal, announced Feb. 6, were not disclosed. The purchase included the HeraldNet.com website, the monthly Herald Business Journal and the weekly Spanish-language regional newspaper La Raza del Noroeste.
From an article in the online Sky Valley Chronicle:
Quite often in these types of sales heads roll as the new owner seeks economies of scale. That appears to be the case here.
According to Herald Publisher David Dadisman, of the some 200 full and part timers at the paper now, less than a third of that work force will have jobs when the dust settles. That’s a pretty big whack and stack as jobs go.
Dadisman is one of those who will be seeking new horizons.
And on top of all this, Black says he’s now ready to sign a financing deal to proceed with a proposed $25 billion (with a B) refinery in British Columbia.
According to the Vancouver Sun earlier this week:
Speaking to the B.C. Chamber of Commerce Black said his new company Kitimat Clean Inc. expects to sign a memorandum of understanding with Switzerland-based Oppenheimer Investments Group for the $25 billion project, including $16 billion for a new refinery. The rest would be spent on oil and natural gas pipelines and tankers.
Black’s project still faces many hurdles, including opposition from environmentalists.
But Richard Cooke, the senior managing director of Oppenheimer Investments Group, said the firm has enough investors interested in the project to fund the entire amount through a debt-financing model that would keep 100 per cent of the ownership in British Columbia. The refinery would still have to be approved by the province.
So it appears Black is now running with the big dogs.