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UK pension body set to put in £305m claim with Johnston Press administrators

Johnston Press

A UK pensions body will put in a £305m claim with Johnston Press’ administrators after raising concerns about the pre-pack deal offered to new owners JPI Media after the regional publisher’s collapse.

The Pension Protection Fund, a statutory fund that acts to save the pension schemes of collapsed companies, confirmed that it was required to make the claim against JP assets under the Pensions Act.

Under the terms of the takeover deal from JP debtholders, who set up JPI Media, the defined benefit pension scheme will not be transferred – a move that could affect pension payments to 250 employees.

Defined contribution pensions will still be offered, however. It has been reported that the overall deficit of JP’s defined benefit pension scheme stands at more than £40m.

Earlier this week, a PPF spokesperson said: “We want to reassure members of the Johnston Press pension plan that their benefits are protected by the PPF at what must be an unsettling time for them.”

The chairman of the Work and Pensions Select Committee has also raised questions about JP’s pensions following its sale last Friday.

Frank Field MP sent a letter to Pensions Regulator chief executive Lesley Titcomb in which he asked for details of its discussions with the publisher, adding that he found it “difficult to understand” how JPI Media could buy JP “without taking any responsibility for its pension scheme”.

The independent MP has also written to PPF chief executive Oliver Morley to set out the fund’s concerns about the administration deal.

He also asked Morley whether he believed “adequate protections are in place to prevent schemes being dumped on the PPF, at cost to pensioners and levypayers”.

In a statement on pension concerns, a JP spokesperson said: “Johnston Press has been in regular dialogue with its Pension Scheme Trustees, The Pension Regulator, and the PPF since 2014.

“Throughout our extensive and detailed discussions during the strategic review we have kept them informed every step of the way.

“Up until the administration the company met all its obligations to the scheme, with more than £55m paid in relation to the plan from the beginning of 2014.

A spokesperson for JP administrator Alix Partners said: “Alix Partners, in conjunction with the board and other advisors, worked closely with all relevant regulatory bodies and stakeholders, including those relating to pensions, prior to the administration and will continue to do so as required.”

JP bondholders agreed to wipe out 60 per cent of the £220m owed to them, extend the final repayment date to 2023 and inject £35m of new money into the group. 

The move is said to have secured jobs and the future of JP’s more than 200 titles, which include the i paper, Scotsman and Yorkshire Post.

Bondholders, who are the investors owed money by JP, include Goldentree Asset Management, Fidelity, Caravel Asset Management and Benefit Street Partners, according to the Financial Times.

The majority bondholder, New York-based hedge fund Goldentree Asset Management, has $27bn of assets under its management.

Its primary investments are in high yield bonds, leveraged loans and distressed debt, according to the company’s Linkedin profile.

Quarterly holdings reports submitted by Goldentree to the US Securities and Exchange Commission show the fund has previously held equity in US broadcaster CBS.

Press Gazette contacted Goldentree for information on any other investments it had made in the news industry, but was told it does not speak to the media.

US-based Fidelity has held equity in several media firms, including CBS, the New York Times, the parent company of US radio broadcast SiriusXM and Rupert Murdoch’s News Corporation. 

The investment giant, which is based in Boston, has more than two trillion dollars worth of assets under management, with shares in Amazon, Facebook and Google parent company Alphabet.

Caravel Asset Managment is a Hong Kong-based investment management firm. Benefit Street Partners, based in New York, is also an investment manager.

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