Statement by Custos on latest events regarding Johnston Press

Late yesterday evening we learned that the Board of Directors of Johnston Press Plc in collusion with the majority bondholders, US hedge fund GoldenTree Asset Management, filed for administration of Johnston Press for the purpose of effecting an immediate sale and transfer of its business to a new company, to be run by the current Johnston Press CEO Mr King, and controlled by the bondholders, in a so-called pre-pack. We understand the Johnston Press pension scheme will not transfer to the new company resulting in the pensions of the hardworking and loyal staff of Johnston Press being severely reduced.

Custos Group is the largest shareholders in Johnston Press and we have worked tirelessly as an activist shareholder to change the composition of the board so we could implement the necessary changes in direction which would provide a better and brighter future for the company itself, its staff and members of the pension scheme.

At every stage we have been thwarted by a self-serving board which, in clear breach of its fiduciary duties, has only been interested in protecting itself and the bondholders.

When issuing the bond, the Board included a “poison pill” in its terms, the first of its kind in the UK, which meant that the overall control of the Board was safe guarded as if that were to be changed, then that would trigger the repayment of the £225 million bond debt.

We have consistently accused the Board of not having fresh ideas or a clear and effective strategy for the way forward. They have done nothing more than re-arranging the deckchairs on the Titanic. When Custos attempted to appoint a director to the Board to inject some much-needed direction and oversight, the Board ensured that this was blocked by deliberately misrepresenting to all shareholders that such a move would trigger repayment of the bond, when in fact it would have done no such thing, as we did not seek to change the control of the board.

This Board is purely self-interested, with a toxic mix of incompetence, arrogance and entitlement added. Their actions today, ensuring their own jobs are safe, but sacrificing the pensions of their loyal staff, many of whom will no doubt also lose their jobs under the new ownership of a US hedge fund, is simply a disgrace and a vulgar display of the worst elements of capitalism.

The Board of Johnston Press, had they been willing to cooperate with their largest shareholder, could have ensured a bright future for the company. According to all the public statements of the Board, Johnston Press has are as on able cash flow and was not insolvent. Indeed, the bond debt is not due and payable until June 2019 – another 7 months away! We believe, this is plenty of time for us to have managed to put in place are financing had we only been given the chance. However, instead of having a sensible dialogue with us and working with us to achieve a genuine rescue for the benefit of all stakeholders as well as JP’s staff and their pensions, the Board has instead done what they could to hinder us whilst paying lip service to the notion of saving the company. The strategic review and the formal sale process were nothing more than a complete sham. However, it is now clear for all to see that the Board of Johnston Press has instead only been pre-occupied with one thing, namely the sacrifice of the company’s staff and their hard-earned pensions in order to save the Board’s own jobs by colluding with Bondholders. Such actions are simply shameful and disgusting and Custos will now fight to hold this despicable Board accountable for their contemptible actions.

As a public declaration and vote of confidence in the staff and business of Johnston Press and its proud 250 years long history, Custos recently increased its stake in Johnston Press from 20% to 25%. That the Board, in which we had absolutely no confidence, can honestly think that turning the business over to a greedy New York hedge fund is the only viable solution for Johnston Press, simply beggars belief. Moreover, it simply proves our point that the Board is totally incompetent and bereft of ideas and, in colluding with GoldenTree, is acting out of pure personal self-interest and personal self-preservation. Custos is a tireless activist and fighter and, on behalf of all stakeholders in, and staff of, Johnston Press we will do everything in our power to overturn and unwind this abominable deal.

 

Christen Ager-Hanssen
CEO
Custos Group

 

The Watchdog – Transparency from the Grassroots to 10 Downing Street

In a world awash with identity-politics, fake news, politicised big media and illusory social media, there has never been a time when independent, honest, robust, properly-regulated and authoritative local newspapers have been more important. Britain’s local and regional press is the best in the world, but a large part of it finds itself under attack.  It deserves to be properly defended.

I confess that I have always been a fan of what I would call ‘neighbourhood journalism’. A small-town boy from the Norwegian municipality of Halden, my childhood memories include paging through the local newspaper once my parents had finished reading.  Today, I enjoy the almost magical way in which it combines good old-fashioned accountability with digital era technology.

I love how local journalism engages and remains conscious of the magnitude of the world, while synthesising local issues. I also understand how vital an instrument neighbourhood journalism is; how it provides knowledge and information to everyone, even individuals living in tiny isolated or rural communities. And I know with absolute certainty how essential local and regional news is to the preservation of truth in a world of politically-motivated “fake news”. But can local journalism survive in a world full of apathy, bias and identity-driven social-media? I am certain beyond any reasonable doubt it can and I am committed to making certain it does!

Unfortunately, no one of note seems to be defending local and regional journalism—that is no one but me. This is now my personal crusade. I want to fight for the rights of people to have access to local, regional and national news that matters to them.  I want to continue to offer reputable reportage, bleached clean of the mistruths of grand scale media policymakers whose goals are usually inconsistent with small community residents dependent on local journalism for reliable news.

How do I fight? I am an activist shareholder and I fight by changing the narrative. I fight by demonstrating that digital disruption can work. I fight by holding management to account.  Currently I am fighting to keep alive Johnston Press, a multi-media company with a proud history going back 250 years which currently has a diverse holding of near 200 flagship and local and regional titles which include The i, The Scotsman, The Yorkshire Post, The News and The Burnley Express, just to mention a few.

With its many titles, Johnston Press strives to serve local communities throughout Britain and influences the lives of almost 40 million each month through both digital and hard copy formats.

It would be a tragedy if Johnston Press, weakened through long-term mismanagement by a self-serving board, should fall prey to opportunistic players from big media and the financial world. They have no interest in seeing Johnston Press remaining intact and continuing to provide much needed local and regional news, and nor do they have any interest in maintaining the jobs, prospects and pensions of the so many talented people who work tirelessly in bringing honest and independent news to the many communities of Britain. Johnston Press, its journalists and staff and the media consumers of Britain deserve better.

Custos, as the largest shareholder of Johnston Press, will continue to fight tirelessly to ensure that Johnston Press will remain intact and continue to provide trustworthy news which, to borrow a phrase from Lincoln’s Gettysburg Address, is “of the people and for the people”.

 

Christen Ager-Hanssen
CEO
Custos Group