European newspaper publisher Mecom has won a two-month reprieve from its lenders and said today that it was “confident” it would find a long-term solution to its finance problems in the new year.
In a trading update, the company – chaired by former Mirror Group chief executive David Montgomery – said it had held “constructive discussions” with its lenders after it was reportedly in danger of breaching its lending agreements with the banks by the end of this month.
The banks have now agreed to wait until the end of February before assessing whether the group has breached the limit on the amount of debt it can have in relation to its earnings.
Montgomery, the Mecom executive chairman, acknowledged today that “challenging” trading conditions and worsening exchange rates meant the group needed to reduce its debt levels.
He said the company was looking to sell off some titles to raise cash and had received approaches “for a number of assets” but there was no certainty that the disposals would go through.
Mecom owns about 300 titles in the Netherlands, Germany, Norway, Denmark and Poland.
Montgomery said the Mecom board was confident that it would reach a “long-term solution” to its funding problems in the first quarter of the new year.
“The deterioration in global economic activity is continuing to affect advertising adversely in our markets,” he said.
“We continue to believe that Mecom’s operating model is the right one and progress continues to be made in restructuring the cost base and developing new revenue streams.”
Shares in Mecom fell 1.15 per cent this afternoon to an all-time low of 0.86p, down from a year high of 51p.
Today’s price gives the company a market value of £13.5m.