Court approves survival plan for Sunday Business Post

The future of the Sunday Business Post has been secured — the Commercial Court yesterday approved a survival plan for the newspaper.

Nine redundancies have taken place reducing the workforce to 65 and staff have agreed to a 6% wage cut as part of the scheme which will see a €750,000 investment in the Sunday paper.

The newspaper will officially exit examinership this afternoon.

The €750,000 investment by Brindisi Limited, with an address at Sir John Rogersons Quay, will be part equity investment along with a €350,000 interest free loan.

Staff who have agreed to reduced terms and conditions including the wage cut will also become 6% stakeholders in the newspaper.

Mr Justice Peter Kelly before approving the investment scheme considered a confidential document prepared by the administrator of the examinership, Michael McAteer, which the court heard contained commercially confidential information and was not going to be opened to the court.

Counsel for the administrator, Rossa Fanning BL said the information in the document which included projections on sales and advertising could give the court a degree of comfort that the newspaper has a reasonable prospect of survival.

The loan part of the investment, he said, was interest free and the loan would not fall due for a year.

The administrator, he said, had hoped to get a superior investment but the newspaper had been losing money for the last four years. The commercial reality was, counsel said, that the investor will have to write a cheque for €750,000 and the prospect of repayment is tied to the future performance of the company. The administrator reported that despite significant interest from a variety of parties it proved difficult to get an investment and the investment was less than had been originally hoped.

Counsel said the employees of the newspaper were faced, towards the end, with the stark choice of: a terms and conditions change and a salary cut and some redundancies, or liquidation. Mr Fanning said the workforce were sophisticated, educated and intelligent people who made a rational decision to back the plan.

Under the plan, super preferential creditors, including the Revenue, will be paid the agreed debt in full while unsecured creditors — the largest which is Irish Life which is owed nearly €2 million in relation to the newspaper office premises at Harcourt Street, Dublin, will get 2.5% of the agreed debt. The court heard there will be a €53,000 pot for the unsecured creditors.

Distributors and freelance contributors to the newspaper will get 15% of what they are owed, including Vincent Browne who is owed a total of €25,000.

Approving the plan, Mr Justice Peter Kelly fixed 4pm today for the company which owned the Sunday Business Post, Post Publications, to exit examinership. The administrator, he said in his report, had set out his difficulties encountered in securing an investor and the amount was less than hoped but was counterbalanced by the cost-saving achieved during the examinership.