Monday, 27 July 2009

FT: 'Sweetener for Johnston Press' lenders'

Lenders to Johnston Press are set to own 5 per cent of the company as part of the terms of a debt restructuring "sweetener", the Financial Times reports today.
Johnston Press, which has £450m debt, is in talks with lenders to reset covenants, as well as an extension of the repayment deadlines on its debt.
The FT says: "Lenders are also likely to be given warrants to subscribe to a 5 per cent stake in the company in exchange for their support, people familiar with the situation said. However, there will be no debt forgiven as part of the deal."
Johnston Press said in June that lenders had agreed to defer testing covenants from June 30 to August 31 pending the outcome of discussions on a refinancing.
The FT adds: "The company has not commented on what other options it could explore to reduce its debt amid speculation of a sell-off of some regional titles, including The Scotsman and the Yorkshire Post.
"Analysts say the regional newspaper industry will be able to survive only if it obtains sufficient scale by consolidating. If current merger laws are relaxed, this is likely to come about through nil-premium mergers rather than takeovers.
"They also believe the 'big four' regional newspaper groups – Trinity Mirror, Johnston Press, Newsquest and Northcliffe – should become a 'big two'. "

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