Johnston Press, owner of the Halifax Courier, has successfully completed its £360m capital refinancing plan, having raised £140m from a rights issue and a further £220m from a new fixed rate bond.
The media company, which owns 250 newspapers and almost 200 local news and e-commerce websites, announced its intention to refinance in May as part of plans to fund future business growth.
Shareholders took up 92.25% of some 4.6 billion new shares that were issued and the company’s underwriters, Panmure Gordon and JP Morgan Cazenove, secured investors for the remaining 7.75%. The new shares are now trading on the stock exchange.
In addition, broadcasting giant Sky entered into a ground-breaking strategic regional partnership with Johnston Press, agreeing to a £5m investment. Under the terms of the agreement Sky has made available its new product, Sky AdSmart Local, to part of Johnston Press’ extensive sales network with a view to rolling it out further at a later date.
The new finance package has allowed the company to pay off its £300m bank debt and operate with a new, reduced debt of £225m. This comes with a reduced interest rate so Johnston Press is paying half the interest it was, creating a platform from which to return the business to overall growth and secure the future of the Halifax Courier.
The company expected the share price to fall to around 4.8p following the rights issue and it is currently trading at a little below this.
Chief executive Ashley Highfield said: “Our new financial arrangements represent a considerable achievement and demonstrate a high level of confidence externally in our strategy and our future growth. We are in a more stable position to move forward and I am confident the share price will move upwards as we start to achieve our strategic aims.”