Scotsman publisher Johnston Press could be forced to ‘surrender part of the company to its banks’in order to secure a new life-saving loan, according to reports.
Last week shares in the company – which has £350m of debt – fell 13.6 per cent after it announced it was delaying publication of its annual results by three weeks in order to continue talks on renewing its debt.
The Sunday Times reported that Johnston’s creditors, including Royal Bank of Scotland and Lloyds Banking Group, ‘could end up with the right to buy a stake in the company as part of the refinancing deal”.
While the ‘broad outline of a debt deal has been agreed’which lowered the cost of servicing the company’s loans Johnston could be hit with ‘heavy penalties unless it reduces its debt”, sources told the paper.
In an interview with The Sunday Times, Highfield also revealed the company could drop the ‘Press’from its name. It comes a week after Highfield announced he wanted to ‘flip the model from newspaper-first every day to digital-first”,
Highfield was quoted saying: ‘I don’t identify this company by the medium with which it disseminates its media. When asked, ‘but isn’t it called Johnston Press?’he replied: ‘At the moment.’
Highfield also said the debt talks were ‘just detail’and that he wanted to announce the refinancing at the same time as the results.
In February Johnston announced it was scrapping its five senior managing director roles as part of a restructure that saw it remove an entire layer of management.
Highfield appeared to suggest more changes could be on the way, adding: ‘I have made changes aimed at simplifying the organisation. But if we are going to be more integrated we need to be more fleet of foot.’