Newspaper giant Johnston Press sold out of administration

Johnston Press, the owner of publications such as the I newspaper, The Scotsman and the Yorkshire Post, has been sold out of pre-pack administration after appointing administrators earlier today.

The publishing house put itself up for sale last month as it sought to refinance £220m of debt that was due to be paid back next year. 

The pre-packaged sale has been awarded to JPIMedia, a newly-formed holding company owned by some of Johnston Press' major bond holders. The deal includes a £35m cash injection, as well as a reduction of its £220m debt by more than 60 per cent to £85m.

Additionally, the debt's maturity has been extended until the end of 2023.

Trading of the company's shares, which are listed on the Main Market of the London Stock Exchange, have been suspended until Johnston's listing can be cancelled on Tuesday.

In a statement late last night, Johnston Press said that it had received no offers to date which delivered "sufficient value" to tide the company over, and thus would be going through with administration proceedings.

It was reported earlier this week that the owner of the Daily Mail newspaper was in the early stages of planning a bid for the I newspaper alone, which caused Johnston's share price to skyrocket more than 20 per cent. It was last valued at £3.5m, down from a peak of £1.4bn before the financial crash in 2008.

As part of today's deal, Johnston Press employment contracts will be transferred to JPIMedia and salaries will be paid as normal. However, its pension scheme will not follow suit and as such, the government's Pension Protection Fund will be notified.

The transfer of Johnston Press, which employs more than 2,000 staff across over 200 titles, is expected to be completed before the end of the weekend.

"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," said David King, now chief executive of JPIMedia.

"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. I look forward to working with JPIMedia to assess and implement the opportunities available to us in the future, underpinned by a stronger balance sheet."