£360 million refinancing plan a success

Johnston Press, owner of the Montrose Review, has successfully completed its £360 million capital refinancing plan, having raised £140 million from a rights issue and a further £220 million 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 per cent 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 per cent. 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 £5 million 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 £300 million bank debt and operate with a new, reduced debt of £225 million. 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 Review.

The company expected the share price to fall to around 4.8 pence 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.”