(Adds details, CEO quote, share price)
May 9 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
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
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
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)