Shareholder slams Johnston Press rescue plan as pensions put at risk
A deal to buy publishing company Johnston Press out of administration puts jobs and pensions at risk, according to the publisher’s largest shareholder.
Custos Group chief executive Christen Ager-Hanssen criticised a pre-packaged sale that sees ownership transferred to JPI Media, a newly-formed company owned by the bondholders of Johnston Press, including American hedge fund Goldentree Asset Management. Custos has a stake of over 25 per cent in the publishing giant.
Ager-Hanssen said today that while jobs had been protected in the short-term he was unhappy at the way the sale had been handled and voiced concerns about the long-term security of jobs under the ownership of a US hedge fund.
“Today’s pre-pack was not so much a corporate rescue as a blatant pre-planned corporate theft by bondholders, suitably aided and abetted by Johnston Press’ incompetent and double-tongued board and its chief executive David King,” Ager-Hanssen said in a statement.
But sources close to Johnston Press told City PM Ager-Hanssen was offered the chance to make a proposal for the sale but had failed to do so, adding that the deal was the best possible resolution to the company's financial troubles.
Johnston Press, which owns 200 titles including the I newspaper, the Scotsman and the Yorkshire Post, put itself up for sale in October and went into administration on Friday after it failed to secure a deal to resolve debts of £220m.
The company's share price soared last week after it was reported that the Daily Mail's owner was planning to make an offer for the I newspaper.
But on Saturday the newly-formed JPI Media said it had bought the publishing group in a deal that secures jobs and the future of its titles.
It said the bondholders had agreed to reduce the company’s debt by more than 60 per cent to £85m and provide £35m of additional funding. It has also extended debt maturity to December 2023.
But the agreement does not secure the company’s defined benefit pension scheme, which will be referred to the government’s Pension Protection Fund (PPF).
In a letter to colleagues JPI Media chief executive David King said 250 current staff members could see their future pensions affected.
"The negative effects on the scheme are an inescapable consequence of taking the steps needed to ensure the future of the business," he said.
The National Union of Journalists (NUJ) also expressed concern about the deal, calling for “meaningful guarantees” to protect jobs and titles at the company.
Michelle Stanistreet, NUJ general secretary, said: “We welcome the commitments made by the current management of Johnston Press that no jobs will be lost in this process and the terms and conditions of staff are protected.
“However, we have significant concerns about what the long-term intentions of the newly-created company will be. We want meaningful guarantees on the future and integrity of these titles and the livelihoods of staff, and a commitment that this is not a transition leading to a carve-up of the group motivated by asset-stripping rather than a commitment to journalism and publishing.”
The NUJ said it will hold further talks with Johnston Press on Monday.