KMPG to review Johnston Press bank deals

Published on Sunday 8 February 2009 20:29

JOHNSTON Press, owner of The Scotsman, yesterday confirmed it has appointed "big four" accountancy firm KPMG to undertake a review of its banking facilities.

As a result, the newspaper group said it expected to renegotiate the terms of its 465 million debt facility with bankers this summer, ahead of the September 2010 expiry date.

The Edinburgh-based company is also considering the sale of some of its assets after it appointed Irish corporate finance specialist Raglan Capital as adviser. It is understood the company approached Johnston Press with "sufficiently persuasive" offers for some Irish titles, believed to be the Leinster Leader and the Kilkenny People .

In November, Johnston Press said it planned to renegotiate its debt facilities early in 2009 rather than in 2010.

KPMG was brought in just weeks after new chief executive John Fry took up his post with the group last month. It is understood the group will commence discussions with its principle banks – Royal Bank of Scotland, Lloyds Banking Group, Barclays and National Australia Bank – following the publication of its annual results next month.

The accountancy firm may also look at possible sales of other titles to boost the Johnston Press balance sheet, although this would not start until after the results are released.

KPMG is also expected to undertake a cost-cutting review. A source close to the company confirmed the group's titles were cash generative and "still profitable" despite seeing revenues affected by the recession.

In November, the group reported a 15.5 per cent fall in advertising revenues for the 44 weeks to 1 November compared with the same period of the previous year.

Johnston grew rapidly under Fry's predecessor, Tim Bowdler, who carried out a string of acquisitions to make it the UK's second-largest newspaper group.