Johnston Press administrator warns of cash shortfall for creditors
‘NewsLetter’ publisher used controversial insolvency process to stay afloat
Johnston Press publishes a range of high-profile titles including The Scotsman. Photograph: PA Wire
The administrator of Johnston Press has warned of a “significant shortfall” of cash for creditors after the publisher used a controversial insolvency procedure to keep the business afloat.
In its first report for creditors, released on Friday, AlixPartners said that while funds would be available for distribution to secured bondholders, and prescribed unsecured creditors, of Johnston Press, “there will be a significant shortfall to creditors”.
Johnston Press publishes the NewsLetter in Belfast and the Derry Journal.
Last week a company set up by lenders to Johnston Press acquired the publisher, saying debt cancellation and a cash injection would allow titles including the Scotsman, the Yorkshire Post and the i to continue operations as normal.
The “pre-pack administration” deal was completed following the court appointment of administrators to Johnston Press.
The report for creditors revealed that Johnston Press received several offers for the company before it filed for administration. The best offer valued the company at between £140 million (€158 million) and £150 million, significantly less than the £220 million Johnston Press owed its bondholders and not enough to cover its liabilities. – Copyright The Financial Times Limited 2018