Johnston Press to Stage Rights Issue
14/05/2008
This morning, Johnston Press, issued a statement saying that, subject to the approval of shareholders, it intends to raise £212.3 million by a combination of an one-for-one rights issue and a straightforward sale of equity to a Malaysian company, Usaha Tegas, which is taking a 20 per cent stake in the company.
The move is prompted by the company view that, “since the end of the 2007 financial year, the company’s trading performance has been adversely affected by decreasing advertising revenues and the directors believe this challenging environment will continue in the near term”.
The company continues: “Whilst the business remains cash generative, current credit market conditions suggest a recapitalisation is a prudent measure.”
It goes so far as to say: “In view of these factors and as the current environment and outlook remain uncertain, there remains a possibility that if revenues were to deteriorate further, without the proceeds of the subscription and the rights issue, a breach of the group’s financial covenants could occur.”
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comments
- "Right on Badger.
As a recent former JP advertising employee I can vouch for all of the above. They need to invest money into their products AND staff. Clients don't want to advertise in generic, unspecific products which generate little response and readers don't want to read the same supplements time and time again.
They wouldn't need to invest a lot of money into this but instead utilise the talents of the minions they already employ to lay the ground work.
JP have already unofficially laid off advertising staff by manipulating long standing members to leave so they can implement their own uneffective agenda.
JP need to wake up and realise that if they don't take the right action NOW they are going to lose a lot of money and staff"
cuckoo1 14/05/2008
report content as inappropriate - "Yeah right. Forget the PR speak, the company's share price has fallen off a cliff in the past two years, and they need liquidity because they can't go to the banks. Cue some lay offs to "protect the future of the business" as rival boss Tim Blott would say."
wemuststrike 14/05/2008
report content as inappropriate - "It's a pity they haven't realised that they need to actually invest some money in their papers in order to attract more advertisers.
It's a radical thought I know but maybe if JP actually paid their staff decent wages/filled vacancies efficiently/supported their titles with adequate funds, then they may have some quality newspapers on their hands.
But, then again, I suppose its easier to get an extra £200 million this way. I wonder how much of that will be handed down to the slaves in their newsrooms?"
Badger 14/05/2008
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