Investing.com -- Lee Enterprises Incorporated (NASDAQ:LEE) saw its stock price surge 27.9% on Tuesday after the company announced plans for a share placement aimed at raising up to $50 million to support its digital transformation.

The media company, which provides local news and information services, revealed on Monday evening that it has reached a preliminary agreement with its term loan lenders, which could significantly reduce its interest burden. If Lee successfully raises the full $50 million, its annual interest rate will drop from 9% to 5% for five years, potentially saving approximately $18 million annually and up to $90 million over the five-year period.

Lee plans to use the net proceeds from this offering for working capital and operational investments, particularly in technology related to advertising strategies, audience expansion, internal operations, and digital products. This move comes as traditional media companies continue their transition to digital business models.

The proposed rights offering will provide existing shareholders with subscription rights, including a basic subscription right and an over-subscription privilege. Holders who fully exercise their basic rights will be entitled to subscribe for additional shares of the company's common stock at the subscription price.