Johnston Press gets some breathing room

Debt-laden newspaper group Johnston Press today slumped to a £144 million annual pre-tax loss and has had to offer up to another 7.5% of the company’s shares to its lenders as part of a refinancing deal.

Chief executive Ashley Highfield, who joined in November, insisted his strategy of converting some print titles from daily to weekly and investing in websites and apps made sense.

Highfield, the former BBC boss in charge of iPlayer, wants to turn the owner of the Yorkshire Post and the Scotsman “local, social and mobile”.

He said he has received “hundreds and hundreds of emails” of support from staff since announcing his “platform-neutral” strategy earlier this month.

Digital revenues grew just 0.7% last year to £18 million, representing 5% of its £374 million turnover, which still comes chiefly from print.

He said the £393 million refinancing deal which runs to 2015 showed the banks “believe in the future of the company”. Lenders have been given the right to convert debt into equity — through warrants — depending on performance.

They already held warrants over 5% of the equity and will get a further 7.5%, meaning they could potentially take 12.5% of the company. Johnston, which is valued at £36 million, has £352 million of net debt.