The boss of Johnston Press has urged the company’s 2,000-plus staff to adopt a “business as usual” approach while the company seeks a new owner.
JP, publisher of more than 200 local and regional titles, announced this morning it was putting itself up for sale after failing to come up with a refinancing package to pay off its £220m debt.
But David King, who has been running the company since former chief executive Ashley Highfield’s departure in May, has sought to reassure its 2,141 staff that the business still has a “positive future.”
In an email sent to all staff today, he said: “This process is about securing a positive future for Johnston Press. In the meantime, it is business as usual.
“Johnston Press is a strong and resilient business with good profits and strong profit margins, great people and prestigious titles.
“I am certain that whatever the future ownership of the Company, we will continue to produce our titles long after the end of the strategic review
“It is important that we all work over the coming weeks to show the outside world how good our titles are.”
Scottish Conservative leader Ruth Davidson, herself a former JP employee, also revealed she had spoken to Mr King this morning to discuss the future of the group, which has 200 staff based in Edinburgh where Ms Davidson is the MSP and another 90 at various centres across Scotland.
She said had sought reassurance that the future of the workers in Edinburgh will be a priority in any deal that is struck and that the management will look to keep the group together.
Ms Davidson said: “I spoke with Johnston Press CEO, David King, and his senior team in Edinburgh today to seek reassurance for workers at this critical time.
“It is a time of immense worry for those employed by Johnston Press, who are being asked to continue to operate to their usual professional high standards while their future is in doubt.
“Mr King and his team stressed that historic debts and issues regarding debt refinancing meant new ownership was the most likely way to put the group on a long-term sustainable footing after several years of uncertainty.
“I sought, and received, assurances that the primary goal was to sell the group as an ongoing concern and in its entirety, rather than to see it broken up.
“As a former Johnston Press employee myself, I know the hard work and professionalism the staff put in every day to deliver quality journalism to communities right across Scotland; often under very difficult circumstances.
“I hope a buyer can be found soon to secure hundreds of Scottish jobs and will continue to work locally and nationally to ensure that is the case.”
The National Union of Journalists said it had also been speaking to management following the sale announcement.
A spokesperson for the union’s Johnston Press group chapel said: “We’ve all known for some time now that the company being put up for sale was one of the possible consequences of the strategic review, but it doesn’t make today’s announcement any less unsettling for members working for Johnston Press and those whose have money invested in its old defined benefits pension scheme.
“Our priority, as always, is to support our network of workplace reps and to ensure that we do all we can to get the best possible deal for every NUJ member, whatever happens in the weeks and months ahead.”
Laura Davison, NUJ national organiser, added: ” There will be a whole range of questions about the implications of the announcement and we will continue to press the company for meaningful consultation about decisions that are being made as the process unfolds.”
The company decided to put itself up for sale after a “strategic review” failed to come up with a plan to repay the £220m debt which becomes due on 1 June 2019.
In its statement to the Stock Exchange inviting offers for the company, it made clear it is neither in discussions with any potential buyers nor has it received any such approaches.
JP’s biggest shareholder Christen Ager-Hanssen, who launched an abortive takeover bid for the company last year, has so far made no public comment in response to the announcement.
Although the JP board is thought to want to sell the business as a single entity, there are likely to be separate bids for prized assets such as national daily the i, which is now valued at £60m having originally been purchased from Evegeny Lebedev for £25m.
The full text of David King’s email to staff is as follows:
“As you may have already seen, this morning we have launched a formal sale process. This means that Johnston Press is officially for sale and looking for a suitable buyer.
“This is entirely in line with the objectives of our strategic review. A sale to a suitable buyer is one of the options available to us as we explore ways to repay our debts and deal with our pension fund deficit. However, there is no certainty that a firm offer will emerge from this process.
“This process is about securing a positive future for Johnston Press. In the meantime, it is business as usual. Johnston Press is a strong and resilient business with good profits and strong profit margins, great people and prestigious titles.
“I am certain that whatever the future ownership of the Company, we will continue to produce our titles long after the end of the strategic review. As I have explained before, most recently at our interim results, our newspapers and websites continue to perform well against a tough market backdrop.
“We made £6.2m in pre-tax profits in the first six months of the year, and we continue to grow our digital audience thanks to all of your efforts.
“I know that today’s news will be unsettling for everyone, even for those of you who had perhaps been expecting an announcement of this kind. Our intention is that a short period of uncertainty will put an end to the longer-term uncertainty we have all felt over the past few years.
“You may well read speculation about what this all means in the weeks ahead. While we will not be able to offer a running commentary on the process because of the restrictions placed upon us by the Takeover Panel, I remain committed to keeping everyone in all areas of the Company as informed as possible.
“It is important that we all work over the coming weeks to show the outside world how good our titles are. With that in mind, there are three things to remember while this process is under way:
* It is business as usual: the process will not affect your day-to-day roles.
* Trading with suppliers and customers will carry on as usual.
* The stronger we are now, the stronger we will be on the other side of this process.
“If you have any questions or concerns that you’d like addressed, please speak to your manager, or email email@example.com. I would also ask that should you receive any enquiries from other media, you forward to the above email as well.
“The regulations which govern this process mean that the Company is required to write to you to provide you with a copy of the announcement that we made this morning, and certain other information.
We will write to you separately with this information.
“In the meantime, thank you for all your hard work.”