Deal to save cash-crippled printers

The printing firm once owned by disgraced tycoon Robert Maxwell said today it had approved a restructuring of its debt mountain to save the company from collapse.

Polestar, which prints the Radio Times and Country Life, said ownership of the firm will transfer from Bahrain-based investment bank Investcorp to its creditors.

Creditors including Deutsche Bank, JP Morgan and Royal Bank of Scotland will write off two-thirds of the debt they hold in exchange for a 100% stake in Polestar.

However, smaller creditors, mainly banks, will lose the £350m (€516.6m) they are owed as Polestar slashes its debt from £814m (€1.2bn) to £272m (€401m).

The Financial Times said the total losses for Investcorp and the creditors could be as much as £700m (€1.03bn) after the restructuring. Investcorp is thought to have lost its entire £250m (€369m) investment in the firm.

Polestar was created in 1998 when Investcorp merged Watmoughs with the British Printing Company, which was part of Maxwell’s business empire, in an £810m (€1.2bn) deal.

The company, which employs 4,800 staff at sites across the UK as well as in Spain and Hungary, prints supplements for newspapers such as The Times and The Sunday Times as well as magazines including Now, Hello! and Woman’s Own.

The business hit trouble after 2000 as advertising revenues declined and printing prices increased.

Polestar chief executive Barry Hibbert said today: “The completion of the restructuring has greatly strengthened Polestar. The recapitalisation provides the business with a stable platform which will allow it to focus on the opportunities in the market place.”