Sunday Times Today10 Jun 2018 19:22
Lots of speculation in the Sunday Times. Angers seems to have backed a loser here.
The new chief executive of Johnston Press has refused to rule out disposal of key titles The Scotsman and The Yorkshire Post, as the troubled publisher�s debt crisis intensifies.
David King, who officially took over as boss of the Edinburgh-based business last week, said he could not be certain the titles wouldn�t be sold in the next 12 months.
Johnston, which has a market cap of less than �7m, has reached crisis point in long-running restructuring talks with bondholders over its �220m debt pile, which must be repaid within the next 12 months.
When asked whether Johnston would still own The Scotsman and Yorkshire Post a year from now, King told The Sunday Times: �I can�t say 100% certain. It would be mad of me, with so many options to pursue, to speculate on what it [Johnston Press] might look like. But if you ignore who owns the company and you ask is The Scotsman a profitable, valuable title, it�s a tick, so it would carry on trading regardless.�
King added: �There comes a point when it [the debt restructuring] is not in our hands potentially, but the job is to keep it in our hands. I can�t give gradations of outcome but I�m doing everything to get an outcome that protects value for all stakeholders.�
King�s comments were made to The Sunday Times at Johnston�s annual meeting in Edinburgh last week and were followed by the group�s confirmation it is considering entering a regulated apportionment arrangement (RAA) to transfer its pension scheme to the Pension Protection Fund. Johnston has a pension deficit of �47m on liabilities of �609m.
The move would allow Johnston to detach itself from its pension scheme, placing it under the control of the fund, which exists to protect members if a pension fund becomes insolvent. RAAs are rare and usually require a company to be within 12 months of insolvency. Such a move would effectively leave US hedge fund GoldenTree, which owns most of Johnston�s �220m bond debt, in control of the business.
King added he was �getting good engagement now� with GoldenTree and that it was being �constructive�, but he declined to comment further.
GoldenTree declined to comment. The US hedge fund bought the bonds at a discount and is estimated to have paid about 60p in the pound. It is understood to have spent about �100m to acquire some 75% of the debt. Since then, GoldenTree has earned about �30m in bond interest income.
If the entire company is liquidated or its titles sold off by GoldenTree, it is expected to raise a minimum of �150m, giving the hedge fund a total return of about �145m on its initial investment
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