Posted by Harry Mottram on 12th Aug 2018
It seems impossible but Johnston Press, the mighty newspaper group and owner of titles across the country could collapse any day without a financial package to save it writes Harry Mottram.
The board of directors issued a challenge to the 20 percent stakeholder Christen Ager-Hanssen of the Custos Group. The board of directors challenged Ager-Hanssen to come up with a rescue plan to refinance £220m of debt after he became concerned by reports of pre-pack deal was being considered. That could have cost him his stake as pre-packs have a reputation for dumping debt with the firm sold for a knock down price on the proviso jobs are saved. The Scandinavian businessman said in reply: “If we are going to refinance the bond, we need to look into the books, we need to sign a (non-disclosure agreement), we need to have a dialogue.”
Johnston Press owns more than 200 titles in print and online that includes the i, The Yorkshire Post and The Scotsman. Ager-Hanssen may be seeking to acquire the business on favourable terms before a major restructuring process takes place since its value has fallen to a fraction of what it was a year ago.
Johnston Press said in a statement reported in Hold The Front Page following Christen Ager-Hanssen’s intervention: “The board of directors of Johnston Press plc notes the rise in the company’s share price today and confirms that it knows of no operational or corporate or other reason for the price movement. The company continues to explore a number of strategic options for the restructuring or refinancing of its bonds and confirms that no agreement on these potential options has been reached. The company received a letter from Custos Group AS on Friday, 20 July, and notes the press commentary on this over recent days. The company confirms that it is not in receipt of any plan or proposal from any party for a refinancing or restructuring of its debt. Further announcements will be made as appropriate. As stated previously, any proposal that results from these discussions will remain subject to negotiation and consent of relevant stakeholders, and there can be no certainty that a formal proposal will be forthcoming.”
Ager-Hanssen told Reuters earlier this week that he had received a reply from Johnston Press asking for him to clarify his position. He says: “If we are going to refinance the bond, we need to look into the books, we need to sign a (non-disclosure agreement), we need to have a dialogue.”
Reuters reported that Johnston Press has: “Struggled with declining revenue as advertisers increasingly use online platforms, drawing the attention of activist investor Custos, which has previously sought to oust the company’s chairman.”
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