Jobs maintained, papers continue
Johnston Press re-emerges as JPIMedia with 60% less debt
Johnston Press, owner of The Scotsman and ‘i’ newspapers, was today formally placed into administration and acquired by JPIMedia, a newly-formed company owned by its bondholders in a move that wipes £135m from its debt.
Apart from a substantially de-levered balance sheet the group will receive new capital. The bondholders have agreed to reduce the level of senior secured debt by more than 60% from £220m to £85m, with extended debt maturity to December 2023.
Additionally, the bondholders, led by the New York hedge fund manager Golden Tree Asset Management, have provided £35m of new money to provide further additional funding for the business.
The acquisition of the Johnston Press business by JPIMedia secures jobs and the future of its brands and titles, said JPIMedia in a statement.
It said its shareholders “recognise the vital role that local and regional media plays in the communities they serve and remain committed to protecting and enhancing the value of the business in the future.”
Following the earlier announcements, as a consequence of the transaction, an assessment period has been triggered for the defined-benefit or final salary pension scheme, which is likely to enter the government’s pension protection fund. It s is said to affect only about 10% of the employees but there are thousands of former employees with final salary pensions. JPIMedia will offer a defined contribution, or money purchase, pension scheme to all employees.
As earlier stated, David King, the former chief executive of Johnston Press, becomes chief executive of JPIMedia.
He 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.”
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.
“As part of this transaction we have reduced the level of net debt very significantly and invested £35m to put the business in a far stronger financial position. We look forward to working with the management team as they embark on the next chapter in Johnston Press’s story in the media sector, with the resources to support local and national journalism and embrace the digital future.”
The biggest shareholder in Johnston Press, Scandinavia-based Custos Group, is among those whose investments have been wiped out. Christen Ager-Hanssen, who runs Custos, has criticised the deal and has threatened legal action to have it overturned.