Publisher Johnston Press in pre-pack administration deal
Johnston Press, the national media publisher of around 200 titles including the I newspaper, The Scotsman and the Yorkshire Post, has been sold out of pre-pack administration shortly after appointing administrators
19 Nov 2018
The company indicated it was for sale last month, as it sought to refinance £220m of debt that was due to be paid back in June of next year. It was believed that the Daily Mail might have had an interest in buying the I paper, but in the event Johnston Press said it had not received any offers for any part of the business which delivered ‘sufficient value.’
In a statement to the Stock Exchange at the end of the week, Johnston Press said: ‘On 16 November 2018, the company announced that the boards of directors of the company and each of its principal subsidiaries incorporated in Scotland, England and Northern Ireland had resolved to apply to the courts in Scotland, England, and Northern Ireland respectively for administration orders in respect of those companies.
‘Administrators have now been appointed over each of those companies and, in accordance with the company's previous announcement, the businesses and substantially all of the assets of the company's group have been sold by those companies, acting by the administrators, to a newly-incorporated group of companies controlled by the holders of the group's bonds.
‘The transaction will preserve the jobs of the group's employees and ensure that the group's businesses will be carried on as normal.’
Under the deal, Johnston Press’s 2,000 employees will see their contracts transferred over to the new company, known as JPIMedia. However, the deal does not include the pension scheme, which will move into the Pension Protection Fund.
David King, now chief executive of JPIMedia, 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.
‘We will focus on ensuring the group’s titles continue to publish the high-quality journalism we are known for and which has never been more important. I look forward to working with JPIMedia to assess and implement the opportunities available to us in the future, underpinned by a stronger balance sheet.’
Founded in Falkirk in 1767, and listed on the London Stock Exchange in 1988, Johnston Press made a string of acquisitions in recent years, but the constraints of the debt it took on to finance these and changing market conditions, have seen its value drop to around £3m, compared to a peak of £1.4bn before the financial crash in 2008.
Report by Pat Sweet