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Johnston Press: i newspaper publisher sets out rescue plan | |
(about 2 hours later) | |
Johnston Press, publisher of the i, The Scotsman and the Yorkshire Post, has detailed a rescue plan aimed at ensuring its survival. | |
The newspaper group put itself up for sale last month, but said none of the offers it received were strong enough. | The newspaper group put itself up for sale last month, but said none of the offers it received were strong enough. |
It now plans to file for administration and says the firm's assets will then immediately be bought by its lenders. | It now plans to file for administration and says the firm's assets will then immediately be bought by its lenders. |
If the deal is approved by the courts, it will preserve jobs and stabilise the business, Johnston Press said. | If the deal is approved by the courts, it will preserve jobs and stabilise the business, Johnston Press said. |
But shares in the Edinburgh-based company are now worthless and will no longer trade on the London Stock Exchange from Monday. | But shares in the Edinburgh-based company are now worthless and will no longer trade on the London Stock Exchange from Monday. |
And some staff will see the value of their pensions affected, the firm has warned. | And some staff will see the value of their pensions affected, the firm has warned. |
Johnston Press is one of the largest local and regional newspaper organisations in the UK, but has debts of £220m which are due for repayment in June next year. | |
The group said in a statement: "This is the best remaining option available as it will preserve the jobs of the group's employees and ensure that the group's businesses will be carried on as normal. | The group said in a statement: "This is the best remaining option available as it will preserve the jobs of the group's employees and ensure that the group's businesses will be carried on as normal. |
"The group hopes that this transfer will be completed within the next 24 hours." | "The group hopes that this transfer will be completed within the next 24 hours." |
Chief executive David King said in a letter to staff that the move had not been "an easy decision", but it would reduce debt and secure new money for the business. | Chief executive David King said in a letter to staff that the move had not been "an easy decision", but it would reduce debt and secure new money for the business. |
"We are very confident that this is not the end of the story, but the beginning of a new phase in which we work with the new owners of the group to give shape to a new future," he wrote in a letter to staff. | "We are very confident that this is not the end of the story, but the beginning of a new phase in which we work with the new owners of the group to give shape to a new future," he wrote in a letter to staff. |
Mr King said the debt had "constrained us" and that none of the offers they had received for the firm was enough to repay it. | Mr King said the debt had "constrained us" and that none of the offers they had received for the firm was enough to repay it. |
He apologised to staff with a defined benefit pension scheme - some 250 current employees - warning their future payments would be affected by the rescue deal. | He apologised to staff with a defined benefit pension scheme - some 250 current employees - warning their future payments would be affected by the rescue deal. |
"The negative effects on the scheme are an inescapable consequence of taking the steps needed to ensure the future of the business," he wrote. | "The negative effects on the scheme are an inescapable consequence of taking the steps needed to ensure the future of the business," he wrote. |
Mr King said he intended to stay on as chief executive and said the rescue plan was better than "a lengthy and unpredictable administration process". | Mr King said he intended to stay on as chief executive and said the rescue plan was better than "a lengthy and unpredictable administration process". |
Analysis | Analysis |
By Douglas Fraser, BBC Scotland business and economy editor | By Douglas Fraser, BBC Scotland business and economy editor |
Plunging Johnston Press into administration may be one of the better outcomes for the papers and websites the company has controlled - many of them important to communities from Fraserburgh to Eastbourne. | Plunging Johnston Press into administration may be one of the better outcomes for the papers and websites the company has controlled - many of them important to communities from Fraserburgh to Eastbourne. |
Facing a debt repayment deadline next June, with no sign of a refinancing deal, and with the market valuation of the company below £3m, Johnston Press was cornered. | Facing a debt repayment deadline next June, with no sign of a refinancing deal, and with the market valuation of the company below £3m, Johnston Press was cornered. |
In the past five weeks, it has sought a buyer, but failed to find one with enough to tackle the debt. | In the past five weeks, it has sought a buyer, but failed to find one with enough to tackle the debt. |
The deal it has struck with bondholders is that they keep the titles together, take a haircut on the debt and put new funding into the papers to keep the presses rolling - while shedding the defined benefit pension scheme. | The deal it has struck with bondholders is that they keep the titles together, take a haircut on the debt and put new funding into the papers to keep the presses rolling - while shedding the defined benefit pension scheme. |
The new owners could sell it on to a company that knows more about publishing news. | The new owners could sell it on to a company that knows more about publishing news. |
Even if it doesn't, the drop in debt means the outcome is already better than what have been truly painful years for these titles. | Even if it doesn't, the drop in debt means the outcome is already better than what have been truly painful years for these titles. |
But in common with many other conventional news publishers, they're struggling to find a new business model that works. | But in common with many other conventional news publishers, they're struggling to find a new business model that works. |
Long history | Long history |
The publisher has titles covering more than 200 locations from Scotland and Northern Ireland to the south of England. | The publisher has titles covering more than 200 locations from Scotland and Northern Ireland to the south of England. |
It was founded in Falkirk in 1767, and listed on the London Stock Exchange in 1988, growing through acquisitions. | It was founded in Falkirk in 1767, and listed on the London Stock Exchange in 1988, growing through acquisitions. |
The i, which was first launched in 2012 and sells for 60p on weekdays and £1 on Saturdays, is seen as the jewel in the crown of its papers. | The i, which was first launched in 2012 and sells for 60p on weekdays and £1 on Saturdays, is seen as the jewel in the crown of its papers. |
In its latest results, Johnston Press reported a 10% fall in revenues during the first half of 2018. It swung back to a profit of £6.2m for the six-month period, but this was mainly due to a one-off accounting gain of £8.8m. | In its latest results, Johnston Press reported a 10% fall in revenues during the first half of 2018. It swung back to a profit of £6.2m for the six-month period, but this was mainly due to a one-off accounting gain of £8.8m. |
In September, the i recorded a year-on-year circulation drop of 9% to 242,408 copies. | In September, the i recorded a year-on-year circulation drop of 9% to 242,408 copies. |