News, Culture & Society

Johnston Press puts itself into administration amid debt crisis 

Johnston Press, the publisher of the i newspaper, The Scotsman and The Yorkshire Post, has announced its intention to place itself in to administration.

Last month the publisher, which also owns hundreds of local newspaper titles, put itself up for sale after failing to come up with a way of refinancing its £220m debt.

There had been reports that publisher DMGT, which owns the Daily Mail and MailOnline, had offered to buy the i, while ‘numerous parities, had shown interest in other parts of the business. 

Johnston Press, the publisher of the i newspaper, The Scotsman and The Yorkshire Post, has announced its intention to place itself in to administration

However none of these prospective deals came to fruition and Johnston Press have now ended the sales process and say they will enter into administration.

The company’s collapse is a potential disaster for an already beleaguered local news industry.

At its most recent trading update, Johnston reported a hit to revenues, mostly due to changes in Google and Facebook algorithms.

In a statement on Friday, the publisher said ‘following considerable interest in the formal sales process’, and it was decided that none of the offers received delivered sufficient value.

‘The board has concluded that there is no longer any value in the ordinary shares of the company,’ the statement added.

There had been reports that publisher DMGT, which owns the Daily Mail and MailOnline, had offered to buy the i, while 'numerous parities, had shown interest in other parts of the business

There had been reports that publisher DMGT, which owns the Daily Mail and MailOnline, had offered to buy the i, while ‘numerous parities, had shown interest in other parts of the business

Speculation that the publisher might be sold had been growing since it announced the strategic review in March 2017.

In August 2018, the company’s share price spiked, surging by as much as 70% in afternoon trading amid rumours that a mystery buyer was quietly snapping up more stock.

But in confirming the move towards administration, the publisher said all options to refinance or restructure the debt had been explored and that ‘it had not been possible to find a solution acceptable to our financial stakeholders’.

In August 2018, the company's share price spiked, surging by as much as 70% in afternoon trading amid rumours that a mystery buyer was quietly snapping up more stock

In August 2018, the company’s share price spiked, surging by as much as 70% in afternoon trading amid rumours that a mystery buyer was quietly snapping up more stock

The statement added: ‘The board has concluded that it is necessary for the company and its principal subsidiaries to be placed into administration.’

Johnston said it has also requested the immediate suspension of shares trading on the London Stock Exchange, with a cancellation of trading due to follow on November 20.

The company is due to apply for court approval to form a newly-incorporated group of companies controlled by creditors.

‘This is the best remaining option available as it will preserve the jobs of the group’s employees and ensure that the group’s businesses will be carried on as normal,’ the statement added.

‘The group hopes that this transfer will be completed within the next 24 hours.’

Following the announcement Health Secretary Matt Hancock, formerly a culture secretary, tweeted to say the news was ‘very concerning’.

‘Makes stark reality of the intense pressure on the press,’ he added.

Shadow culture secretary and deputy Labour leader, Tom Watson, also tweeted his concern about the ‘late Friday announcement’, adding that he ‘will be reaching out to unions and staff over the weekend’.

In a second tweet he said: ‘Johnston Press going into administration is a grim day for local newspapers and another deeply worrying one for local democracy.’

Leeds North West Labour MP, Alex Sobel, tweeted to say he was sad that Johnston which owns The Yorkshire Post and the Yorkshire Evening Post was going into administration.

‘Local papers raising local and regional issues are vital for our democracy,’ he added.

Read more at DailyMail.co.uk