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Johnston Press ‘to issue £75m of new shares’

Johnston Press is seeking to raise at least £75m from the sale of new shares, according to a national newspaper report.

The Daily Telegraph reported that the company, which has debts of around £300m, is looking to raise the sum via a rights issue.

It said JP would be offering new shares to investors at a discount rate as part of a debt refinancing package to be announced in the spring.

The company has now issued a statement saying it “noted the recent media speculation relating to a potential equity fundraising.”

It went on:  “As set out in the Company’s announcement made on 27 December 2013, the company intends to pursue a refinancing of its debt facilities in 2014.

“The board confirms that as part of a proposed refinancing of its debt facilities it is considering a range of options including a potential equity raising. The quantum of any equity fundraising has not yet been determined.

“There can be no certainty that a refinancing of its debt facilities will be concluded in 2014, nor that an equity fundraising will proceed.

“Further announcements will be made as appropriate.”

As previously reported on HTFP, the company is looking to raise millions from the sale of disused newsspaper offices and also from selling and leasing back current ones.

However this is expected to make only a small dent in the overall debt burden.

The company is also in talks to sell its 14 Irish newspapers for a sum of around £7m, while the recent enhanced voluntary scheme which saw hundreds of journalists leaving the business is also likely to lead to significant savings.

According to the Telegraph, investor appetite for shares in JP has been restored in recent months, following its first rise in operating profits for seven years.

Shares which at one time last year were 6p have risen from 16p to above 26p since the start of the year.

12 comments

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  • March 3, 2014 at 2:12 pm
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    The last one to leave JP, please turn off the lights.

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  • March 3, 2014 at 2:25 pm
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    I’m mystified… How in the hell does a company with so much debt manage to keep improving their share price, when the actual products are being destroyed?

    Maybe the JP bubble is about to burst. Stand back.

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  • March 3, 2014 at 3:01 pm
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    ‘Ribtickler’ asks how a company with so much debt manages to keep improving their share price. The company has met all of its obligations in paying off the debt and reported profit growth in its last results. I’m sure those facts are part of the answer.

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  • March 3, 2014 at 3:38 pm
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    It’s called capitalism Ribtickler (I hope you are not the City Editor?).

    You buy £100k of JP shares at 21p and the next day, after the Weebeastie Bugle sells the old haddock filleting shed it has occupied for the past 150 years, they go up by 2p a share and you sell.

    ‘Creme de la Menthe Rodney’

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  • March 3, 2014 at 4:25 pm
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    The strangest part of this story is that they’re in talks to sell off the Irish titles. Forgive me for my disbelief, but titles bought in 2007 for 136.8m Euros being sold off at just £7m doesn’t seem like good business sense to me..

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  • March 3, 2014 at 5:14 pm
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    The company is squeezing the blood from their employees – latest despicable unilateral decision sees mileage rate cut from 45p to 24p

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  • March 3, 2014 at 7:08 pm
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    CeasetobeAmazed, I think they call it ‘mates rates’.

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  • March 4, 2014 at 9:17 am
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    The people responsible for this debacle leave JP with multi-million-pound share deals and pensions. Let’s not forget, JP paid out £400m in bonuses and dividends to directors and shareholders while at the same time borrowing £400m from the banks to buy other newspaper companies, including those in Ireland. When the crash came and advertising plummeted they couldn’t even pay the interest so they turned on the staff. Yes, it’s capitalism. But don’t believe them when they say there’s no alternative.
    Peter Lazenby.

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  • March 4, 2014 at 9:31 am
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    I cannot understand how, even if this issue proves successful, which I doubt, the company can prosper. It will still have some debt and, as I have said on many occasions, lost key staff that would be able to generate income, particularly in print. JP management are killing off print ahead of its time. Can someone explain to me how a free, digital platform, with adverts that are worth pence not pounds generates income. Mind you, this is the company that I hear placed an ad last week for a ‘Chief Customer Welcome Executive’ (what?!!!) whilst at the same time making receptionists redundant.

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  • March 4, 2014 at 8:08 pm
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    Simples – Shed staff = costs cut = share price rise. Happens everywhere.

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  • March 5, 2014 at 6:52 am
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    ill-informed seems to be the only one with an informed opinion on this subject. Anybody with half a brain knows this is a positive development for JP and I for one hope the staff who remain in this fundamentally sound business can look forward to a more prosperous future in the company.

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  • March 5, 2014 at 12:47 pm
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    Love it. Thanks to ‘Bob the Bulk Sale Builder’ for making me laugh.

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