Johnston Press taken on by debt investors

THE newspaper publisher Johnston Press has fallen into the hands of its lenders after heavy debts forced it into administration.

A new company, JPI Media, controlled by a consortium of debt investors led by New York hedge fund GoldenTree Asset Management, yesterday took control of more than 200 titles including The i, The Scotsman and The Yorkshire Post.

The pre-packaged sale by administrators includes a £35million cash injection and a 60 per cent cut to Johnston Press’s £200million debt pile.

The new company will still be led by David King, the current chief executive at Johnston Press, and will provide “new capital and a strong platform for its staff, operations and publications,” JPIMedia said.

It was confirmed that all supplier contracts will be honoured and that all staff employment contracts will be transferred to the new company.

But the firm warned that the value of pensions will be affected.

Mr King said: “The sale of the business to JPIMedia is an important one for the Johnston Press businesses as it ensures that operations can continue as normal, with employees’ rights maintained, suppliers paid, and newspapers printed.

“We will focus on ensuring the group’s titles continue to publish the high-quality journalism we are known for and which has never been more important.”

Last month Johnston Press launched a formal sale process in the hope of attracting a rescuer after 18 months of talks with advisers.

Its stock market value collapsed to just £3.5million from a peak of £1.4billion before the credit crunch, but industry rivals were reluctant to take on the publisher’s debts, built up in an acquisition spree.