Johnston secures debt reprieve

The owner of the Yorkshire Post and The Scotsman has been given breathing space by its lenders as the group seeks to restructure its £300 million debt pile.

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CPP Group sold card protection on behalf of lenders including HSBC and Royal Bank of Scotland

The owner of the Yorkshire Post and The Scotsman has been given breathing space by its lenders as the group seeks to restructure its £300 million debt pile.

Johnston Press said its banks had agreed to "reset" the conditions attached to its debts until September 2015 and the group has hired financial advisers Rothschild to help with refinancing negotiations in the new year.

The Edinburgh-based publisher has been struggling amid falling newspaper sales and advertising revenues, as well as its hefty debt burden.

But it claimed recently that trading was beginning to turn around thanks to recovery efforts, with its first increase in operating profit for seven years in the six months to June 2013, with earnings up 4.3%.

This was followed by a 7.8% hike in underlying earnings in the 18 weeks to November 2.

Shares lifted 4% as Johnston said the reprieve from its lenders provided the firm with a "stable financial platform" to refinance debts in 2014.

It is thought that a new financing deal by the end of next year could save the group around £25 million.

Ashley Highfield, chief executive of Johnston Press, said: " I am pleased with the ongoing support shown by our lender group in providing a clear path for the continued pursuit of our operational strategy, which has shown very encouraging developments in 2013."

The newspaper group has been slashing costs and cutting jobs in recent years and is relaunching its titles as part of an effort to focus more on digital revenues to offset the woes in demand for print advertising.

It is also in talks to sell its 14 local papers in Ireland.