Rescue deal arranged after Stornoway Gazette owner, Johnson Press, goes into administration
17 November 2018
The Stornoway Gazette’s owner, Johnston Press, has gone into administration after failing to resolve a £220 million debt headache.
However, arrangements are in place to sell the assets to a new corporation to keep the presses rolling.
Under a rescue deal with its lenders, its newspaper titles and properties are being taken over by a newly formed company controlled by firms which own its debt.
The company has a market value of just under £3 million but accepts its shares are now worthless.
Trading of the company's shares on the London Stock Exchange have been suspended.
Johnston Press is expected to be de-
US hedge fund Golden Tree Asset Management -
Chief executive David King will become boss of the new entity.
Staff’s pensions are likely to be hit in the future as Johnston Press’s pension scheme, which carries a £40 million deficit, is being ditched. The fund will not be taken on by the new company and may transfer to the government’s Pension Protection Fund.
The troubled publisher said it failed to attract strong enough offers for the business after putting itself up for sale last month.
Approaches from other publishers to sell specific newspapers were received but “none of the offers received delivered sufficient value,” said Johnston Press.
Neither was a bid from a potential buyer for the whole business enough to repay the £220 million debt by the June 2019 deadline .
The firm said: “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.”
David King e-
He said: “The newspapers and websites will continue to be published as usual.
“As I have stressed on several occasions, our business is profitable with good margins. Our debt has constrained us.”
Mr King added: “If this deal is approved, the debt will be produced, new money will be provided by the new owners, and the business will be in a more stable position.
“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.
“As the intended leader of the proposed new company I will be in touch again as soon as possible over this weekend to update you on the progress towards our goal of securing the future of the business for everyone.”
The National Union of Journalists called for “meaningful guarantees” to protect jobs and titles.
NUJ general secretary Michelle Stanistreet said the loss of the pension fund is a “serious blow” to employees as they will see their entitlements cut.
Ms Stanistreet said: “We have significant concerns about what the long-
“We want meaningful guarantees on the future and integrity of these titles and the
livelihoods of staff, and a commitment that this is not a transition leading to a
carve-
