The publisher launched a strategic review last March to find a solution to the repayment of £220m in high-yield bonds, which mature in June 2019.
On Monday The Telegraph reported that the group is in talks about a deal that would hand control of the business over to US hedge fund GoldenTree, the biggest holder of the debt, via a Regulated Apportionment Arrangement (RAA) with the pension trustees and pensions regulator.
In a statement released yesterday evening (5 June), Johnston Press said: “The company confirms that an RAA is one of a number of potential strategic options for restructuring or refinancing of the bond being considered by the company and its advisers and in respect of which the company expects to discuss with relevant parties in due course.”
Such a deal would offload the pension scheme to the Pension Protection Fund (PPF), enabling GoldenTree to take control of the group and discard pension liabilities without triggering administration, The Telegraph said. But the hedge fund would need to make a payment into the pension scheme to win approval from regulators.
Shares in Johnston Press slumped to another record low of 6.56p this morning. They had already fallen to 7p yesterday morning after the company warned of “extremely challenging” trading in its update for the period from 1 January 2018 to 31 May 2018, issued ahead of its AGM yesterday.
The group said revenues were down 9% in the period, with the trading environment exacerbated in recent months by uncertainty around future paper costs and the impact of GDPR on digital advertising revenues.
Johnston Press chief executive Ashley Highfield left the group yesterday after more than six years in the role and has been replaced by former Time Out Group chief executive David King, who joined the group as chief financial officer in 2013.