Johnston Press agrees €550m financing deal

JOHNSTON Press, the owner of the Limerick Leader and Kilkenny People, has negotiated a three-year £485 million (€550m) financing deal, as pre-tax profits fell 56% to £27.5m in the first six months of the year.

The Edinburgh-based publisher, which has net debt of £424m, also offered share warrants over 5% of the company’s share capital.

Chief financial officer, Stuart Paterson, said: “Although it puts up the cost of our debt, it’s good to have the uncertainty out of the way.

“We have negotiated the best deal that we could do in the current market.”

Johnston sought to refinance its borrowings with its 22 creditors after failing to sell its 13 Irish newspapers in May because bids were too low.

It agreed to defer testing the loan facilities in June.

According to its first-half results yesterday, there was a £0.5 million cost related to the aborted disposal of the Irish businesses.

In Britain Johnston Press publishes the Yorkshire Post and The Scotsman. It denied reports it is trying to sell The Scotsman saying there are “no other disposal plans in place”.

The publisher said its net loss in the six months ended June 30 widened to £67.5m from £64.8m a year earlier. Sales dropped 25% to £218.6m.

Johnston reported a 32.7% drop in first-half advertising revenues but said it has begun to see ad revenues stabilising, with the rate of decline slowing to 26.1% in the first eight weeks of the second half.

“The timing of the economic upturn remains uncertain but advertising revenues are demonstrating greater stability and we expect the cyclical improvement, when it comes, to more than compensate any ongoing structural change,” the firm said.