So it is done! The assets of Johnston Press have this afternoon been sold and transferred to new owners controlled by the Bondholders. Yes, jobs have been protected for now in the immediate short-term. However, Johnston Press was never really insolvent and those jobs were never really in danger. But let’s see how safe those jobs really are now under the ownership of a US hedge fund.
No, had the Board of JP taken its fiduciary duties seriously and acted properly with the best interest of JP at heart, a perfectly sensible long-term solution – one which did not involve robbing its own pensioners and the company’s owners blind – could have been found in good time prior to the maturity date of the Bond next June.
Custos made it very publicly clear in newspapers and on television, that we believed in the business of JP and that we were also willing to take part in a rights issue. The Board, however, chose to ignore its shareholders and no effort to discuss possible solutions with us was ever made by them. The fact is that throughout the formal sale process which the Board instigated on 11 October, we have had no dialogue with the Board as we refused to enter into a sham formal sale process on their terms, terms which would have restricted us from increasing our stake in the market, something which we wanted to do as public declaration of our belief in the business and that we could help repay/refinance the bond.
We have today learned that the Board received several bids and offers for the business during the formal sale process, but that these were, in the Board’s opinion, not adequately good. Why were none of those communicated to their shareholders for consideration and discussion? Why were all possible options not fully explored? How come the now highly favourable pre-packed solution to Bondholders who had already extracted £20 million a year in interest for the last 4 years, was so much better?
The answer is because David King and the Board have disgracefully been colluding with Bondholders over a very lengthy period of time and that the Board had already decided that the business would be pre-packed and sold to Bondholders. As such the outcome was already predetermined long before the formal sale process began. In fact, the new owning company for the business was already incorporated some three weeks prior to the formal sale process began.
Today’s pre-pack was therefore not so much a corporate rescue as a blatant pre-planned corporate theft by Bondholders, suitably aided and abetted by JP’s incompetent and double tongued Board and its Chief Executive, David King. This is the same David King who has now been duly rewarded for betraying his duties to Johnston Press by being awarded a new job as the Chief Executive of the buying company and, we presume, at a salary much higher than the 3O pieces of silver which he has obviously already received as an advance.
For us, this is not about money. It is about good corporate governance for the benefit of all; by that we mean a company’s shareholders and employees collectively and not, as the disgraceful Board of JP have demonstrated, only the bunch of incompetent, arrogant, self-serving directors whose only goal has been to enrich themselves and their pals on other people’s expense.
Custos is a tireless activist and we have faith in the British justice system. This fight has therefore just begun.