The UK pensions watchdog has dropped its investigation into the buyout of news publisher Johnston Press by bondholders.
The Pensions Regulator opened an investigation following the takeover of the i, Scotsman and Yorkshire Post publisher by newly formed company JPI Media in a “pre-pack” administration deal in November last year.
The probe centred around whether there had been a viable alternative to administration and whether it had been “artificially engineered” to avoid an £885,000 pension contribution due the same month.
The regulator said it had “found no evidence to suggest that insolvency was avoidable” or that the administration was “planned to circumvent payment” of the contribution into the Johnston Press Pension Plan.
Related
As such, it said it would not make use of “anti-avoidance powers” that can force companies to pay into pension schemes.
The regulator also said there were no “acts pre-dating the administration worthy of further investigation” and that administrators had confirmed there were no previous transactions warranting further investigation.
In its report, TPR said the Johnston Press pension plan had more than 4,700 members and an estimated buyout deficit of £305m as of 30 June last year.
It said that JP had approached it and the Pension Protection Fund to explore the possibility of freeing itself from financial obligations to its pension scheme to avoid insolvency, but did not meet conditions required to do so.
The regulator said the pre-pack deal had been agreed as a contingency plan in the event there was no other solution for refinancing its debts and no viable offers to buy it. The directors took this action on 16 November.
Administrators sold the businesses and assets to JPI Media for £181m the following day, advising that this was “at the top end” of an independent valuation of its business and assets.
As a result of the sale, future pension payments for 250 employees on the defined pension scheme were set to be affected because the scheme did not transfer over to JPI Media.
Email pged@pressgazette.co.uk to point out mistakes, provide story tips or send in a letter for publication on our "Letters Page" blog
