Johnston Press PLC (LON:JPR), publisher of the i, The Scotsman and The Yorkshire Post newspapers, was bought by its bondholders at the weekend after filing for bankruptcy protection on Friday.
Last month, the struggling publisher put itself up for sale after it reviewed its financial situation, which included a large debt repayment due next year. That sale process ended on Friday with the company concluding its equity had no value and it said then that administration and subsequent sale to a group of companies controlled by the holders of the bonds was the best remaining option.
READ: Newspaper publisher Johnston Press puts itself up for sale
David King, Johnston Press chief executive, who remains at the helm of the newspaper group said: “The sale of the business to JPIMedia is an important one for the Johnston Press businesses as it ensures that operations can continue as normal, with employees’ rights maintained, suppliers paid, and newspapers printed.”
In a statement on Saturday, JPIMedia - a company formed by the group’s bondholders – said: “The transaction provides the group with a substantially de-levered balance sheet, new capital and a strong platform for its staff, operations and publications,”
JPIMedia said bondholders were writing off more than 60% of senior secured debt, which falls to £85mln from £220mln, and would delay full repayment until December 2023.
It said the bondholders would also provide an extra £35mln in funding to the business.
Around 250 current employees are at risk of losing some of their pensions, King said in a letter to staff that was later published online by the group’s editor-in-chief, Jeremy Clifford.
Shares to delist on Tuesday
Johnston Press said on Friday that its defined benefit pension scheme would not transfer to the new entity. Its shares were expected to be suspended with immediate effect on Friday at 2.75p each, with cancellation of its listing expected to follow on Tuesday, 20 November.
However, the Mail on Sunday reported that Norwegian investor Christen Ager-Hanssen, who has a 25% stake in Johnston Press, has pledged to do 'everything in our power' to block the deal.
Ager-Hanssen told The Mail on Sunday: 'I'm a warrior and I will never, ever stop fighting.'
JPIMedia is led by GoldenTree Asset Management, which co-owns the hotel chain Travelodge. GoldenTree is the largest holder of Johnston Press debt, along with Fidelity, Benefit Street Partners and CarVal Investors.
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