THE new owner of The Scotsman has provided assurances over the safety of journalist jobs and scores of regional and local newspaper titles across the UK.
JPIMedia, a company newly formed by Johnston Press bondholders, acquired the businesses and assets of the Edinburgh-based publisher after it went into administration this morning.
And JPIMedia, which will be led by former Johnston chief executive David King, declared that the deal "secures jobs", brands and titles, adding that it will deliver a “de-levered balance sheet, new capital and a strong platform for its staff, operations and publications.”
Johnston moved to put itself into administration after conceding defeat in its attempts to refinance £220 million of bond debt, which was due to be repaid in June, leading to fears over hundreds of jobs.
In a statement issued this afternoon, JPIMedia said that, as part of the transaction, the bondholders have agreed to reduce the level of senior secured debt by more than 60% or £135m, from £220m to £85m, with extended debt maturity to December 2023. It added that bondholders have also provided £35m of new money to provide further additional funding for the business.
On pensions, JPIMedia said in the statement that an assessment period has been triggered for the Johnston Press defined benefit pension scheme.
That comes after Mr King, in a statement yesterday confirming that Johnston was preparing to enter administration, said that the 250 members of the current workforce in the defined benefit pension scheme will see future payments affected by the restructure, in line with pension protection fund (PPF) payment rules.
A defined contribution pension scheme will be opened to all employees by JPIMedia.
Mr King 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.”
The deal drew an angry response from Custos Group, the majority shareholder in Johnston Press, which was last year thwarted in its attempts to gain influence on the board at the publisher. The activist investor, which held 25 per cent of the shares in Johnston, vowed to overturn the deal.
Directing his anger at the Johnston Press board, Custos chief executive Christen Ager-Hanssen said: “Their actions today, ensuring their own jobs are safe but sacrificing the pensions of their loyal staff, many of whom will no doubt also lose their jobs under the new ownership of a US hedge fund, is simply a disgrace and a vulgar display of the worst elements of capitalism.”
He added: “Custos is a tireless activist and fighter and, on behalf of all stakeholders in, and staff of, Johnston Press we will do everything in our power to overturn and unwind this abominable deal.”
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