This letter has been edited slightly for style.
Dear Colleagues,
Further to my earlier emails to you, I am writing to confirm that we have today announced that Johnston Press has been acquired by JPI Media. I am writing to outline as clearly as I can what has happened and what it means for you and would like to thank you for your patience over recent months.
The sale that has been announced was a step in a wider process.
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As you know the company ran an exhaustive Strategic Review over more than 18 months, culminating in the formal sales process. As this did not result in a viable solution, that was capable of repaying the bonds, we were left with no option but for Johnston Press plc and its subsidiaries to file for administration.
Following this, the debt holders in Johnston Press have acquired the business out of administration. This was done to avoid uncertainty for our newspaper titles and employees and allows the business to continue as usual. The historic balance sheet issues have been addressed and I am pleased that the group has been acquired as a whole.
Having explored all avenues in the Strategic Review, this was the only way to achieve continuity for all operations of the Johnston Press Group. As a result of this, our operations continue uninterrupted and so it is important to turn up for work as normal.
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You will remember that I have been saying for some time that we have been facing two issues: first, maintaining the business as a profitable company that is resilient in a very tough market; second, addressing our debt.
As a result of this transaction, the group is on a much sounder financial footing with a substantial reduction in debt and investment of additional funding from the new owners.
I also want to address what has happened with the group pension fund. The defined-benefit scheme will not transfer to JPI Media. This will affect 250 current members of staff and also former staff who are members of the defined-benefit Pension Scheme, which was closed to future accrual in 2010.
The pension trustees will be writing to the small number of members who are affected
The sale to JPIMedia is the best available solution to the issues that faced the group and provides greater certainty for jobs and titles. Through the sale, the senior debt in the business has been reduced by £135m from £220m to £85m (a reduction of more than 60 per cent), and £35m of new money has been invested to provide additional funding for the business.
This should not be seen as the end of the story, but the beginning of a new phase in which we work as part of a new company to tackle the challenges of a tough trading environment and seek to give shape to a new future.
In the meantime, I will repeat my previous request to you for two things: first, to continue your work to produce and support the high quality papers and websites that make this business what it is – there has never been a time when our customers and communities have needed our trusted reporting more; second, to be patient with me and the new board as we work hard to achieve the best possible outcome for the business and the people who work in it.
Your sincerely,
David King,
Chief Executive, JPI Media
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