LONDON (Reuters) - Financially struggling British newspaper group Johnston Press JPR.L, publisher of The Scotsman and The Yorkshire Post, has been bought by its bondholders after filing for bankruptcy protection.
“The transaction provides the group with a substantially de-levered balance sheet, new capital and a strong platform for its staff, operations and publications,” JPIMedia, a company formed by the bondholders, said on Saturday.
Johnston Press, which also publishes the “i” national newspaper, said in July it was exploring debt restructuring, before putting itself up for sale last month and then announcing on Friday that it would be bought by some its creditors.
“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,” said chief executive David King, who remains at the helm of the newspaper group.
JPIMedia said bondholders were writing off more than 60 percent of senior secured debt, reducing this to 85 million pounds ($109 million) from 220 million pounds, and would delay full repayment until December 2023.
The bondholders would also provide an extra 35 million pounds in funding to the business, which has struggled in a tough environment for traditional publishers.
Around 250 current employees are at risk of losing some of their pensions, King said in a letter to staff that was later published online by the group’s editor-in-chief, Jeremy Clifford.
Johnston Press said on Friday that its defined benefit pension scheme would not transfer to the new entity.
The Pension Protection Fund (PPF), an industry-funded lifeboat for ailing schemes, would be notified and the PPF, with the assistance of the scheme’s trustees, would then assess whether the scheme needs to enter the PPF.
($1 = 0.7790 pounds)
Reporting by David Milliken, editing by Louise Heavens