Johnston Press completes £360m capital refinancing plan
Johnston Press, owner of the Express series, has successfully 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 future business growth.
Shareholders took up 92.25% of some 4.6 billion new shares that were issued and the company’s underwriters, Panmure Gordon and JP Morgan Cazenove, secured investors for the remaining 7.75%. The new shares are now 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 at a later date.
The new finance package has allowed the company to pay off its £300m bank debt and operate with a new, 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 your [title].
The company expected the share price to fall to around 4.8p following the rights issue and it is currently trading at a little below this.
Chief executive Ashley Highfield said: “Our new financial arrangements represent a considerable achievement and demonstrate a high level of confidence externally in our strategy and our future growth. We are in a more stable position to move forward and I am confident the share price will move upwards as we start to achieve our strategic aims.”