Morris Communications warns of possible future non compliance with covenants

By Sara Rosenberg

New York, Aug. 14 - Morris Communications Co. LLC may potentially be unable to comply with financial covenants as of Dec. 31, 2008 and is currently monitoring the situation so as to avoid default, according to a 10-Q filed with the Securities and Exchange Commission Tuesday.

Possible steps that may be taken if non-compliance is inevitable include amendments or refinancing of the credit facility, or the sale or transfer of assets with proceeds being used to reduce debt.

The company already obtained an amendment on July 3 that relaxed the minimum interest coverage, minimum fixed-charge coverage and maximum cash flow ratios for an 18-month period from and including June 30 through but excluding Dec. 31, 2008.

Morris is an Augusta, Ga.-based media company.

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