Hollinger calls 35% of 11 7/8% notes, tenders for rest

New York, May 7 - Hollinger Inc. said it has exercised the equity claw option to redeem 35% of its $120 million of outstanding 11 7/8% senior secured notes due 2011.

The securities will be redeemed on June 11 at $1,118.75 per $1,000 principal amount plus accrued interest.

The Toronto owner of a 72.3% voting and 29.7% equity interest in newspaper publisher Hollinger International Inc. said it has also begun a cash tender offer for the remainder of the notes.

Hollinger is offering par plus accrued interest for the securities. The tender is being made in relation to asset sales in connection with the company's offering of C$211 million of subscription receipts and its sale of 275,000 shares of Hollinger International's class A common stock in March. If the subscription receipt offering is not completed, the tender will be reduced to $4.675 million principal amount.

The tender runs through June 8.

Hollinger also said it is calling its series III preference shares and will redeem them on June 11 at a price of C$10.00 plus accrued dividends.

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