Burnley Express owners to enter administration..

[Clarets4me]

The inevitable is to occur.... text of a " Daily Telegraph " article due out tomorrow..

" Newspaper giant Johnston Press to enter administration... "

he newspaper publisher Johnston Press has confirmed it is ending its debt crisis by entering administration and handing control to its lenders, as revealed by The Telegraph. The embattled publisher of The Scotsman, The Yorkshire Post and the i newspaper is applying for court approval to appoint administrators and execute a pre-packaged sale to a new holding company controlled by the New York hedge fund GoldenTree Asset Management.
In a statement sent to employees, chief executive David King said the company's new owners would "provide new money". Mr King said all employment contracts would be transferred to the holding company and staff would continue to be paid as normal.

He added that Johnston Press' pension scheme would not transfer to the new company and said the government's Pension Protection Fund would be notified. The restructuring specialists AlixPartners will handle the administration, which is scheduled over the weekend to minimise disruption to Johnston Press and its portfolio of about 200 titles. The complex legal procedure will involve English, Scottish and Northern Irish courts.

GoldenTree is the dominant owner of £220m in bonds that are due for repayment in June. Amid brutal declines in local print advertising and the dominance of Google and Facebook online, Johnston Press is incapable of refinancing the debt, which costs about £20m a year in interest.

Last month Johnston Press launched a formal sale process in hope of attracting a rescuer after 18 months of talks with advisers. Its stock market value has collapsed to just £3.5m from a peak of £1.4bn before the credit crunch, but industry rivals were reluctant to take on the publisher’s debts, built up in an acquisition spree. The company's board was due to meet on Friday night to assess formally the bids as part of a strictly governed process before insolvency could be declared.

It was reported last weekend that DMGT the publisher of The Daily Mail, was considering a bid for the i, the only national title in the Johnston Press portfolio. However, sources close to the crisis at the company dismissed the idea of a sale prior to an insolvency. The Pensions Regulator is closely monitoring Johnston Press and its £40m pension deficit, and has powers to block any asset sale that could disadvantage pensioners in an administration. Under the terms of the Johnston Press bonds, the proceeds of a sale could be immediately drawn out of the company by lenders. Even at a valuation of £50m, more than twice what Johnston Press paid for the i in 2016, the publisher would not be able to reduce its debt by enough to avoid administration, sources said. The new owner could seek to break up the Johnston Press portfolio once the insolvency process is completed, however. There have been multiple bids for parts of the company.

GoldenTree built up its dominant position in the crisis by buying up Johnston Press bonds on the open market at a discount. Their value fell as the decline in the local newspaper business accelerated following the publisher’s last restructuring in 2014. GoldenTree specialises in risky distressed debt investments, and in recent years has parlayed lending into ownership stakes at Hibu, the owner of the online business directory Yell.com, and Cooperative Bank. The hedge fund also has experience of the newspaper business. In 2010 it converted a bond investment into a controlling stake in Postmedia, a heavily indebted publisher of a portfolio of Canadian titles, but was itself wiped out in another restructuring in 2016. The pre-packaged sale of Johnston Press, which will wipe out its existing shareholders, could prove controversial. The publisher’s biggest shareholder, the Norwegian entrepreneur Christen Ager-Hanssen, has threatened to sue the company’s directors, led by chairman Camilla Rhodes, in the event of insolvency. Mr Ager-Hanssen had also suggested he could be a rescuer of Johnston Press. However, it is understood he did not submit a proposal prior to the deadline on Thursday.

[Clarets4me]

The Company's Pension fund has a shortfall in funding of around £40m, and will not be taken over by the new owners. The Govt. Pension Protection fund will be notified, which may well lead to a loss in pension - income for future pensioners. If senior Civil Servants Pensions were reduced, each year the Government's Accounts ran at a loss, Sir Humphrey and his ilk may be less profligate with their spending !!

[mikeS]

A great loss to Burnley if it’s newspaper goes. As a historian , the Express has been a great source of information not just on football but on other things going on in the town since the 1850s. It’s like getting in a time machine and going back in time to read what was going on in The Cotton Riots, WW1, WW2, Burnley FCs progress through the years etc. I know that it’s had problems and there is the move to online which has affected it, but I still buy it every Friday to see the local news, photographs, sport and Burnley FC. I for one Hope it can continue.

[MRG]

In relation to the shortfall in pension could they not just contact every company who have ever featured in the paper and insist on a voluntary donation? After all, they wouldn’t be where they are now without the newspaper doing the job that they were paid to do.

[ClaretTony]

A great loss to Burnley if it’s newspaper goes. As a historian , the Express has been a great source of information not just on football but on other things going on in the town since the 1850s. It’s like getting in a time machine and going back in time to read what was going on in The Cotton Riots, WW1, WW2, Burnley FCs progress through the years etc. I know that it’s had problems and there is the move to online which has affected it, but I still buy it every Friday to see the local news, photographs, sport and Burnley FC. I for one Hope it can continue.

The archives are brilliant and I've spent many hours researching stuff in the library. But I gave up on the printed edition of the BE some time ago and have now given up on the online edition since they started forcing people to register just to read it.

[bfcjg]

Alas there's been more interesting news in the opening five posts than the express has had in its last few years hence it's decline.
All on line these days.

[FactualFrank]

I find the website is often unusuable though with the 173 adverts that slowly load up. So you're scrolling down the page reading it, then it bounces back up as another advert has finished loading to its full size.

[cricketfieldclarets]

The sad fact is, people can and want to find out news before the burnley express can. Even online.

Its not just the internet thats the death of the local newspaper. Its 24 hour news and the way people want to consume news.

Also its probably not as good a trade for people to go into now.

[COBBLE]

Looks like this web site has an opportunity!

[Grumps]

Even Chris Boden heard the news via another newspaper, which kind of sums it all up