Johnston Press on the brink of collapse

Could Johnston Press be about to collapse?

In the current economic climate no print business seems safe. The once mighty Johnston Press, one of Britain’s largest newspaper groups is teetering on the brink of going into administration.

The trade magazine Print Monthly reported that the Johnston Press share price has collapsed to around just 3p. Christen Ager-Hanssen owns 20 percent of the company and demanded in a letter to know if the board of directors was considering putting the company into administration. The directors responded by challenging the Scandinavian businessman to come up with a rescue plan to refinance £220m of debt.

Ager-Hanssen told Reuters that he had received a reply from Johnston Press asking for him to clarify his position. He says: “If we are going to refinance the bond, we need to look into the books, we need to sign a (non-disclosure agreement), we need to have a dialogue.”

If the media group were to crash then hundreds of jobs would likely to go as well including many in the print industry. The firm owns the national newspaper the i, The Scotsman, the Yorkshire Post, the Falkirk Herald, The News and The News Letter in Belfast along with hundreds of local newspapers and magazines. It is possible that Ager-Hanssen may be seeking to acquire the business on favourable terms before a major restructuring process takes place since its value has fallen to a fraction of what it was a year ago. Or as some think he may be waiting for administrators to be appointed and then do a Mike Ashley and buy the rest of the business for a snip.

Hold The Front Page reported on Johnston Presses’ response to the overture from the Norwegian businessman. The statement says: “The board of directors of Johnston Press plc notes the rise in the company’s share price today and confirms that it knows of no operational or corporate or other reason for the price movement. The company continues to explore a number of strategic options for the restructuring or refinancing of its bonds and confirms that no agreement on these potential options has been reached. The company received a letter from Custos Group AS on Friday, 20 July, and notes the press commentary on this over recent days. The company confirms that it is not in receipt of any plan or proposal from any party for a refinancing or restructuring of its debt. Further announcements will be made as appropriate. As stated previously, any proposal that results from these discussions will remain subject to negotiation and consent of relevant stakeholders, and there can be no certainty that a formal proposal will be forthcoming.”

Meanwhile the company is under pressure from rival newspaper giant Reach (formerly Trinity Mirror). Hold The Front Page reports Reach has targeted Edinburgh for a new online news site which has traditionally been the territory covered by Johnston Press. Reach’s news sites are normally titled Somerset Live or Bristol Live etc, and so it is likely Edinbugh’s will be Edinburgh Live. They undermine the local press with breaking news, court cases and traffic news but have been criticised for their pop up adverts and lack or traditional community news.

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