News owner reduces its debt

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Johnston Press, owner of The News, has completed its £360m capital refinancing plan, having raised £140m from a rights issue and a further £220m from a new fixed rate bond.

The media company, which owns 250 newspapers and almost 200 local news and e-commerce websites, announced its intention to refinance in May as part of plans to fund business growth.

Shareholders took up 92.25 per cent of 4.6bn new shares that were issued and the company’s underwriters, Panmure Gordon and JP Morgan Cazenove, secured investors for the remaining 7.75 per cent. The new shares are trading on the stock exchange.

In addition, broadcasting giant Sky entered into a ground-breaking strategic regional partnership with Johnston Press, agreeing to a £5m investment. Under the terms of the agreement Sky has made available its new product, Sky AdSmart Local, to part of Johnston Press’ extensive sales network with a view to rolling it out further later.

The finance package has allowed the company to pay off its £300m bank debt and operate with a reduced debt of £225m. This comes with a reduced interest rate so Johnston Press is paying half the interest it was, creating a platform from which to return the business to overall growth and secure the future of The News.