Barclay family submit bid to write off some of Telegraph Media Group’s debt

The former owners of the Daily and Sunday Telegraph have made an attempt to regain control of their media assets after they were put up for a sale in a bitter row with lenders.

The Barclay family has submitted an offer to Lloyds Banking Group that would reportedly allow them to write off some of the nearly £1 billion (€1.16 billion) in debts owed to the group’s subsidiary, Bank of Scotland.

It made the move on Wednesday, hours after Bank of Scotland appointed AlixPartners as official receiver to the publisher’s holding company in a move to seize the shares owned by the Barclay family.

[ Telegraph titles set to be sold after Lloyds calls in receivers ]

Bank of Scotland was frustrated at the lack of repayment of the loans, which were bought by Lloyds as part of its takeover of HBOS during the financial crisis in 2008.

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The bank has rejected the latest in a series of proposals to restructure the debts, according to Sky News, which first reported the Barclays’ offer. Sources close to the situation, however, said talks were ongoing and that the Barclay family could still regain control.

Carlyle, a private equity firm which holds a portion of the debt in Barclay-backed companies including online retail group Very, is also reportedly involved in the talks.

Bank of Scotland said on Wednesday that it had replaced board members appointed by the Barclay family with independent directors, and was moving to auction off the Telegraph titles and The Spectator magazine.

Any deal is expected to value the media assets at about £600 million, meaning about £400 million of debts would remain outstanding even if the entire proceeds of any sale were used to repay the loan.

A string of potential suitors has been quickly linked to a possible deal, including DMGT – the owner of the Daily Mail and Mail on Sunday newspapers, MailOnline, Metro and i – and Axel Springer, the German publisher of Bild.

Among the directors being removed from the Bermuda-based holding company, B.UK Limited, is Aidan Barclay, the chair of the newspaper group, who along with his brother, Howard, controls the family’s UK assets.

Twin brothers David and Frederick Barclay bought the Telegraph Media Group, the parent of the newspapers, in a £665 million sale in 2004. The Telegraph’s financial position has improved in recent years, building up its subscription base to more than 750,000. It reported profits of almost £30 million last year.

Bank of Scotland said on Wednesday that although it had appointed receivers because it had not been able to find a “consensual solution” to the dispute, it was “willing to continue discussions to find a suitable solution”. The lender declined to comment further.

The Barclay family declined to comment on reports of a fresh offer. It said on Wednesday that conversations with the bank were ongoing. Carlyle has been contacted for comment. – Guardian service