The beleaguered shares of

McClatchy

(MNI) - Get Report

got a boost Thursday after the newspaper publisher announced plans for a $1.15 billion debt exchange offer and an amended credit facility in an effort to stave off a potential Chapter 11 filing.

The company, many believe, has been teetering on the brink of bankruptcy, and its share price has reflected that possibility. Down 90% from its 52-week high, set last summer, McClatchy shares were trading Thursday afternoon at 86 cents, up 21 cents, or 34%, on quadruple the daily average volume. Having broke the buck four months ago, the company has been close to losing its

New York Stock Exchange

listing.

The debt deal is a private exchange: Debtholders will receive up to $60 million in cash and $175 million in new notes in return for swapping out the old debt securities. But the new notes will have a much higher interest rate -- 15.75%, compared with the prior range of 4.63% to 7.15%.

McClatchy, which publishes 30 dailies including the

Sacramento Bee

, the

Kansas City Star

and the

Miami Herald

, has about $2 billion in debt on its books.

Meanwhile, the company held its annual meeting on Wednesday in Sacramento. According to

The Associated Press

, only a "handful" of shareholders showed up. The company's chief executive, Gary Pruitt, strove to put on a good face, saying, "I like to think of the McClatchy of the future as an athlete: fit and trim, yet muscular where we need to be."

The company has laid off 4,000 workers since last year as advertisers follow readers out of print on onto the Internet.

McClatchy's situation is not unique, of course. Seven other newspaper publishers have gone belly up in the last seven months; even the

New York Times

(NYT) - Get Report

has been the subject of insolvency worries. But unlike some of its peers, at least, McClatchy pursued an aggressive expansion plan before the recession set in, loading up on debt to buy rival newspaper chain Knight-Ridder in 2006, at the peak of the last boom.

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