Johnston Press: i newspaper publisher sets out rescue plan
Johnston Press: Publisher of i paper bought out
(about 1 hour later)
Johnston Press, publisher of the i, The Scotsman and the Yorkshire Post, has detailed a rescue plan aimed at ensuring its survival.
The future of newspapers previously owned by Johnston Press has been secured after they were acquired by JPIMedia, a spokesman said.
The newspaper group put itself up for sale last month, but said none of the offers it received were strong enough.
The newly-formed company bought out Johnston Press, publisher of the i, The Scotsman and the Yorkshire Post, following the court appointment of administrators earlier on Saturday.
It now plans to file for administration and says the firm's assets will then immediately be bought by its lenders.
Johnston Press said it meant employees would keep their jobs.
If the deal is approved by the courts, it will preserve jobs and stabilise the business, Johnston Press said.
The newspaper group put itself up for sale last month.
But shares in the Edinburgh-based company are now worthless and will no longer trade on the London Stock Exchange from Monday.
Johnston Press was one of the largest local and regional newspaper organisations in the UK, but had debts of £220m which were due for repayment in June next year.
And some staff will see the value of their pensions affected, the firm has warned.
Its chief executive, David King, previously said the debt had "constrained us" and that none of the offers they had received for the firm was enough to repay it.
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.
Mr King, who is now the new chief executive of JPIMedia, said the sale was "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".
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.
He said it would focus on ensuring the group's titles continued to publish "the high-quality journalism we are known for and which has never been more important".
"The group hopes that this transfer will be completed within the next 24 hours."
And John Ensall, director of JPIMedia, said: "In the absence of another financial solution being available for the business, we are pleased to have reached this agreement to acquire Johnston Press, to protect the value of the business, preserve jobs and allow for the uninterrupted publication of its websites and newspapers."
But Custos Group - the largest shareholder in the newspaper group with 25% - says it will try to block its collapse into administration and has accused the company's board of incompetence.
He said that as part of the transaction, it had reduced debt levels significantly and would invest £35m into the business.
In a statement, Custos chief executive Christen Ager-Hanssen described the move to offload the staff pension scheme as a "disgrace and a vulgar display of the worst elements of capitalism".
Custos, whose shares will soon be worth nothing, insisted the publisher had a reasonable cash flow and was not insolvent.
'New phase'
Johnston Press 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.
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.
"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".
Analysis: Administration 'one of the better outcomes'
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.
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.
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.
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.
Meanwhile, the National Union of Journalists has said it has "significant concerns" about the long-term intentions of the newspapers' new owners.
Meanwhile, the National Union of Journalists has said it has "significant concerns" about the long-term intentions of the newspapers' new owners.
The union is demanding "a commitment that this is not a transition leading to a carve-up of the group motivated by asset-stripping rather than a commitment to journalism and publishing".
The union is demanding "a commitment that this is not a transition leading to a carve-up of the group motivated by asset-stripping rather than a commitment to journalism and publishing".
The NUJ is expected to meet Johnston Press management on Monday.
The NUJ is expected to meet Johnston Press management on Monday.
The publisher has titles covering more than 200 locations from Scotland and Northern Ireland to the south of England.
Jewel in the crown
Johnston Press had 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, was 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.
