Ashurst advises Johnston Press on pre-packaged administration

Ashurst acted for Johnston Press PLC and its subsidiaries in relation to its strategic review culminating in a pre-packaged administration sale of the entire business and assets of the group to a new company owned and controlled by the group's bondholders which was announced the evening of Friday 16 November.

This follows a detailed and thorough examination of all possible options to address the £220 million debt burden of the group which is the largest publisher of UK Regional Newspapers and owner of the "i", the digital version of the former Independent Newspaper. Given the debt burden and a large pension deficit and the fact that the group operates in an industry in strategic decline, Ashurst alongside N M Rothschild & Co, the group's financial advisors, have explored multiple options for the group including a debt for equity swap, third party equity and/or debt refinancing and a regulated apportionment arrangement of the group's defined benefit pension scheme as well as a formal sales process for the entire group.

The value of the group, however, compared with the size of its liabilities, has meant that it has not been possible to find a solution acceptable to all of the group's financial stakeholders other than effecting a pre-packaged administration process transferring all of the business and assets of the group to a new company owned and funded by bondholders. This has preserved the jobs of all of the group's employees and ensured the continuation of the business as a going concern. Administration orders were obtained in England, Scotland and Northern Ireland following the company's announcement on the afternoon of Saturday 17 November.

The Ashurst team was led by Giles Boothman, global head of Ashurst's restructuring and special situations group and included RSSG partner, Ru-Woei Foong, M&A partner, Karen Davies and high yield partner, Tamer Bahgat. Other team members included Jack Isaacs (RSSG), Natalia Sokolova (high yield) and John Gordon (pensions).

Commenting on the restructuring and sales process, Giles Boothman said:

"Our team has been working on this for a considerable period of time and explored all possible options during the strategic review. In the end, the pre-packaged administration was the only option that was achievable. A very significant benefit of this is that it achieves the survival of the group and the transfer of all of its employees. This process needed to be executed over the course of the weekend in order to ensure the minimum amount of disruption to the business, its customers, suppliers and employees. Our teams worked very hard to ensure a smooth transition."

Ashurst will also be acting for AlixPartners, who were appointed by the court as administrators in relation to the administration.