Lee Enterprises Inc., will suspend its dividend payments to help pay off its bank debt, the company announced today.

Lee, the parent company of the Bismarck Tribune, negotiated an agreement with its lenders to increase flexibility in payment of its debt; that agreement increases its interest but also increases the targets it can meet before defaulting on payments.

Suspending the dividend will save the company $34 million a year, said Mary Junck, Lee chairman and chief executive officer, in a news release.

"Like others in our industry, we have taken these actions as a result of some of the worst economic conditions in our lifetimes,"Junck said. "The continuing housing and credit turmoil, coupled with rising unemployment and tight consumer spending, have inflicted a prolonged toll on advertising revenue and earnings."

Lee must bring its debt down to 4.25 times its cash flow before reinstating dividend payments; the company's lenders will allow the ratio to rise to 6.75 through September of 2009 but begin declining after September 2010.

"We remain confident that Lee will emerge strong when the economy improves, but current trends indicate a need for this additional flexibility in meeting our debt obligations,"Junck said.

The company's credit line was dropped from $450 million to $375 million.

Lee Enterprises publishes 49 daily newspapers, more than 300 weekly and specialty publications in 23 states.

- Crystal R. Reid