Johnston Press halts sale of Irish papers

Johnston Press says in its interim management statement today that it has called off the sale of its Irish newspapers and is in talks with its debt providers.
The statement says: "The Board confirms that the sale process being conducted to dispose of the Republic of Ireland titles has now been terminated. While there was considerable interest shown from both trade and financial buyers, the Board decided that it was not at a sufficiently high price to be in the Company's best interest.
"As stated in March 2009 in the Company's preliminary results, if the sale of the Irish businesses were not successfully completed, there would be a strong likelihood of a breach of a financial covenant in the Group's debt facilities during 2009.
"Given such uncertainty, the Group had begun discussions with its debt providers to obtain a relaxation in the debt covenants, as well as putting in place more appropriate facilities extending beyond September 2010. Those discussions, which have so far been constructive and supportive, continue with all of the Group's providers of debt. The Company expects to have the refinancing discussions completed and new facilities in place before its half year announcement in late August."
In the 19 weeks to 9 May 2009, total advertising revenues were down 34.4 per cent compared to the same period last year.Net debt at the end of April 2009 was £448m down £29m from the start of the year.
Chief Executive John Fry said: "Whilst our market remains fragile, we have seen some stability in advertising revenue over recent weeks, our cost reduction programme is on track, and we are making good progress in the discussions with our debt providers. This gives us encouragement that we will be well placed to benefit from any recovery in the economy as and when it emerges."