‘Metro’ owner seeks rescue for i paper publisher
Private equity boss plans to increase stake in Johnston Press and reduce interest rate on £220m bond debt
A NORWEGIAN investor aims to offer a lifeline to the debt-laden publisher of the i newspaper before it falls into the hands of US hedge funds, with plans to use its online audiences as a launch pad for digital start-ups.
Christen Ager-hanssen, whose private equity firm, Custos, owns the Metro freesheet in Sweden, bought more than 5pc of Johnston Press on Wednesday. The move sent Johnston Press shares climbing nearly 10pc yesterday.
In an interview with The Daily Telegraph, he said he plans to increase the stake. He also intends to refinance the £220m bond debt casting a shadow over the future of the 250-year-old publisher, which is also behind scores of local newspapers.
Mr Ager-hanssen, who runs Custos from Mayfair, London, said: “I believe in the company and I think that they will be able to sort out the bond issue and that we can help them do that.
“I think we need to move quite quickly. This is something that will happen over the next six months.”
The 55-year-old added that he plans to “take the initiative” ahead of US hedge funds that have bought up Johnston Press’s bonds at a discount. Lenders led by Goldentree Asset Management have been positioning themselves to take control of the publisher following an ongoing restructuring. Credit ratings agencies say it will not be able to refinance its debts when they are due for repayment in 2019.
Mr Ager-hanssen said Johnston Press cash generation is “strong enough” to refinance the debt at an interest rate of only 3pc, compared to the current rate of 8.6pc.
He said he had investors lined up to take on the debt and that shareholders can maintain control of the company, which has a stock market valuation of only £14m. Mr Ager-hanssen declined to identify the would-be lenders or say whether he was working with Crystal Amber, the activist fund that is Johnston Press’s largest shareholder with a 21pc stake.
Mr Ager-hanssen said: “The shareholders are there and we will be able to work out the solution for the company. We have people backing us to take the whole bond.
“If you look at it they are sitting on some interesting titles, like the i and The Scotsman. I think that the company has a future as long as you are able to restructure. I will not comment on who we are working with. I will just say the company is interesting and after a restructuring there will be shareholder value there.”
Custos bought Metro, which is unrelated to the British freesheet of the same name, and associated websites earlier this year. Mr Ager-hanssen said there would be no direct financial link with Johnston Press, but that he plans to use its digital assets in the same way, bartering exposure online for equity in start-ups.
He said: “I don’t think we see any strategic synergies. Where we are focused is actually building audience and we want to invest heavily into UK media. And we will do that. We will increase our stake in Johnston. You can take Johnston’s audience, which is 32 million, or 34 million, and kick-start new companies like we did in Sweden.”
A spokesman for Johnston Press said: “As a major new shareholder, and with his experience, we of course welcome a conversation with Christen and a meeting has been set up.”