Lloyds may take stake in newspaper publishers

LLOYDS Banking Group is believed to be mulling a stake in Dunfermline Press, the Fife newspaper group whose future has been shrouded in uncertainty since the death of its majority shareholder in May.

It is understood that the state-backed bank is preparing to take a stake as part of a major debt-for-equity restructuring of the business, which publishes more than 30 local papers in the UK and Ireland.

Questions have surrounded the heavily-indebted publisher since the loss of Deirdre Rom-anes, who was also the group's chief executive, earlier this year.

According to the most recent available accounts, for the 12 months to the end of March 2009, the publisher had bank debt of 29.7 million - most of which was repayable after five years. It made a loss of 77,700 after tax during the year although this was an improvement on 2008 when its balance sheet was dented by a pre-tax loss of 1m.

A spokesman for Lloyds last night declined to comment although a source close to the institution confirmed it was Dunfermline's lender.

Dunfermline, which is one of Britain's oldest newspaper groups, embarked on an aggressive expansion under Romanes' leadership. In 2004, she acquired a number of titles in the Borders, including the Galashiels-based Border Telegraph, while in 2007 the firm bought a cluster of Berkshire-based titles in a 10m deal with Trinity Mirror.

However, like many other media groups, the firm was hit by a slump in advertising during the economic downturn.