The Telegraph-owning Barclay family have described reports that the business could enter administration as “unfounded and irresponsible”.
Rival broadsheet The Times reported last night (6 June) that Telegraph Media Group’s holding company, Press Acquisitions Ltd, was on the “verge of administration”.
The Times story was widely followed up by other titles. Sky News reported last night that Lloyds is preparing to launch an auction process to sell the Telegraph newspapers and The Spectator “within days”.
The Times report by Times business editor Richard Fletcher and enterprise editor James Hurley said that receivers could be appointed within days after the breakdown of talks between Lloyds Banking Group and the publisher over unpaid debts. Once in administration, the Telegraph would be sold by the receivers in order to repay creditors.
Update: In a further report today (7 June) The Times reports that AlixPartners has been appointed as receiver to B.UK, a Bermudan-based holding company that ultimately controls The Spectator (1828) Ltd and Telegraph owner Press Acquisitions Ltd. The Times understands that B.UK has seized control of shares owned by the Barclay family in the two publishing businesses.
According to the 2021 accounts for Press Acquisitions (the holding company of the Telegraph), some £65m is owed to Lloyds Banking Group. The Times reports that Lloyds is also exposed to some part of intra-group loans totalling £200m.
A source “close to talks” between Lloyds and Barclay family told the FT “hundreds of millions” is owed to Lloyds.
A source close to negotiations told the FT: “This is about historic finance and not about the performance of the Telegraph. This is a longstanding issue between the family and LBG over a legacy HBOS loan. The banker has shown forbearance for a number of years but has finally had enough.”
Press Acquisitions reported a pre-tax profit for 2021 of £29.6m on turnover of £245m.
The Barclay brothers bought The Daily Telegraph, Sunday Telegraph and The Spectator for £665m in 2004.
There have been reports circulating since 2019 that the Telegraph titles (now owned by a separate company from The Spectator) are up for sale.
Press Acquisitions is in turn part of May Corporation Ltd, incorporated in Jersey, which is in turn controlled by Sir David and Sir Frederick Barclay Family Settlements.
A spokesman for the Barclay family said: “The loans in question are related to the family’s overarching ownership structure of its Media Assets. They do not, in any way, affect the operations or financial stability of Telegraph Media Group. The businesses within our portfolio continue to trade strongly, are run by independent management teams, are well capitalised with minimal debt and strong liquidity. They have no liability for any holding company liabilities, continue to operate as normal and are unaffected by issues in the holding company structure above them.
“Telegraph Media Group has been performing extremely well and now has over 750,000 subscribers. The company recorded a 25% increase in Operating Profit during 2021, has recently successfully acquired Chelsea Magazine company, and is progressing strongly towards meeting its targets. Speculation about the business entering administration is unfounded and irresponsible.”
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