Newspaper giant Johnston Press on brink of administration

Irving Hamilton
November 17, 2018

Johnston Press, the owner of the i, the Scotsman and Yorkshire Post, has gone into administration after being brought to its knees by debts of more than £200m.

The media group which owns the oldest English language daily newspaper in the world plans to file for administration.

With 2,000 employees and more than 200 titles, Johnston Press remains one of the biggest employers of journalists in the United Kingdom but the growth of digital platforms such as Facebook and Google, and the rise of "citizen journalism", have cost it dearly.

In a statement, Johnston Press said: "Following considerable interest in the Formal Sale Process, the Board has concluded that none of the offers the Company has received deliver sufficient value and has ended the Formal Sale Process".

Recent market valuations have put the price of the company at around £3m, with any potential buyers taking on £220m in borrowing due for repayment next June. "Each approach was examined carefully".

"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", he wrote in a letter to staff.

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The newspapers and websites will continue to be published as usual and suppliers will be contacted in order to re-establish trading relationships.

Mr King said all employment contracts would be transferred to the holding company and staff would continue to be paid as normal. "Our debt has constrained us".

In 2014, the company sold off the 14 newspapers it owned in Ireland, including the "Limerick Leader" and "Kilkenny People".

"Despite our attempts to engage, none of our shareholders has made any proposal to Johnston Press regarding the restructuring or refinancing of the bonds generally or submitted bids", said King.

The company also added that the defined benefit pension scheme will not transfer and the Pension Protection Fund will be notified and the PPF, with the assistance of the Trustees of the Scheme, will then assess whether the scheme needs to enter the PPF.

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