UPDATE 1-Johnston Press unveils refinancing plan to halt revenue slide

Fri May 9, 2014 5:18am EDT

Related Topics

(Adds details, CEO quote, share price)

May 9 (Reuters) - Johnston Press Plc, publisher of "The Scotsman" and "The Yorkshire Post", unveiled a 360 million pound ($610 million) capital refinancing plan designed to reverse a long-term decline in revenue.

The company said it plans to invest surplus cash in its digital business, where revenue is growing, in sharp contrast to the falling circulation of its newspapers and a decline in print advertising revenue.

As part of its refinancing, Johnston Press plans to raise 2.3 million pounds by placing 13.68 million shares at 17 pence a piece - a discount of 29 percent to the stock's Thursday close.

Shares in the company fell 25 percent to 17.53 pence in early trading, making it the top percentage loser on the London Stock Exchange on Friday morning.

Edinburgh-based Johnston Press said on Friday that adjusted group revenues declined in the mid-single digits in percentage terms in the 17 weeks to April 26, hurt by lower circulation and print advertising revenue.

But the company said that the rate of decline had slowed in print advertising. Digital revenue rose during the same period.

Johnston Press, which agreed last month to sell its operations in Ireland, returned to growth in underlying operating profit in 2013 for the first time in seven years.

Chief Executive Ashley Highfield said in a statement that the refinancing plan "will provide a platform from which the group can return to overall revenue growth and generate increased surplus cash flow".

Johnston Press said the plan would also involve a rights issue to raise 137.7 million pounds, the issue of new bonds to raise 220.0 million pounds and a 25 million pound revolving credit facility.

Panmure Gordon and JP Morgan Cazenove are the joint bookrunners and underwriters of the refinancing plan. Rothschild is the financial adviser.

On Friday, Johnston Press also announced an advertising partnership with British Sky Broadcasting Group. ($1 = 0.5899 British Pounds) (Reporting by Roshni Menon and Noor Zainab Hussain in Bangalore; Editing by Robin Paxton)

FILED UNDER: