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Business

JP administrators to face £305m claim

The NUJ, the PPF and politicians are calling for answers from Johnston Press owners following news that the publisher had been bought in a pre-pack administration deal, which saw the company’s defined benefit pension scheme transfer to the Pensions Protection Fund (PPF).

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Johnston Press was sold to JPI Media to mitigate its £220m debt

Johnston Press administrators are facing a claim of £305m from the PPF, a figure which is calculated to be the cost of securing the benefits of Johnston Press’ pension scheme members.

A spokesperson for Johnston Press told Hold The Front Page: “Johnston Press has been in regular dialogue with its pension scheme trustees, the Pension Regulator and the PPF since 2014. Throughout our extensive and detailed discussions during the strategic review we have kept them informed every step of the way. Up until the administration the company met all its obligations to the scheme, with more than £55m paid in relation to the plan from the beginning of 2014.”

Questions now must be asked why Johnston Press’ board pursued a pre-pack administration deal which offloaded a pension deficit of at least £40m onto taxpayers

The Pensions Protection Fund said it had “concerns surrounding the details of this pre-pack administration.” It adds: “We will continue to work working closely with The Pensions Regulator and the company administrator to ensure the best outcome for the PPF and our levy payers. We want to reassure members of the Johnston Press Pension Plan that their benefits are protected by the PPF at what must be an unsettling time for them.”

Lesley Laird, MP for Kirkcaldy and Cowdenbeath, has called for a meeting with bosses of the newly-formed JPIMedia to seek clarity for the Scottish newspaper titles the company owns.

Laird comments: “Questions now must be asked why Johnston Press’ board pursued a pre-pack administration deal which offloaded a pension deficit of at least £40m onto taxpayers and devalued future pension pay outs for hard-working local journalists.

I need a more substantial commitment than that and will be contacting CEO David King to find out what the nuts and bolts of that promise actually look like

“It’s only thanks to journalists’ pride, loyalty and sheer graft that JP newspapers in Scotland survived a decade of continual staff cutbacks by management and yet, in the final death throes of Johnston Press, staff were penalised yet again.

“Employees have been given reassurances by JPI Media that jobs have been safeguarded under this new deal. I need a more substantial commitment than that and will be contacting CEO David King to find out what the nuts and bolts of that promise actually look like.”

A report published by Johnston Press administrators Alix Partners revealed there had been an offer of between £140m and £150m for the publisher from an undisclosed source. Administrators said that the offer “assumed no pension plan deficit”.

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