Johnston Press fold into insolvency
Johnston Press fold into insolvency with AlixPartners brought in to handle the administration.
The newspaper publisher, owner of The Scotsman and the i newspapers, was put up for sale last month as it struggled under £220m of debt but failed to find a buyer.
Johnston Press,was founded in Falkirk, Scotland in 1767 and operates more than 200 newspapers and websites throughout the UK and Ireland. It’s portfolio also includes a job advertisement website, a business directory and an online property search product in conjunction with Zoopla.
The assets of the company have however been transferred into a new company called JPI media, a newly incorporated company run by the bondholders. This will at least preserve the titles owned by the company and many of the jobs.
The company’s defined benefit pension scheme, which has a £40m deficit, will not transfer, leaving thousands of former employees with a reduced income as it shifts to the Pension Protection Fund.
The other unsecured creditors will also be left high and dry, not given the same protection as bond holders, as many SMEs will be wondering what to do after being left with their invoices due from a key customer, unpaid and now worthless.
The shareholders will also face a total lost.
How can CPA help?
This is another reminder than just because you sell on credit to large businesses, it doesn’t mean you are trading risk free. We have seen many large companies fold in recent years leaving many small businesses struggling with over exposure. They are not invincible.
At the Credit Protection Association, we provide first class credit information that can help you avoid being over extended to customers who are at risk. Our monitoring service can flag up warning signs long before the end, giving you the chance to adjust and reduce your exposure.
We massively reduced our recommended credit limit on Johnston Press Plc on our credit reports earlier this year to one sixth of the previous recommended limit as warning signs were noticed. Our clients who were monitoring them would have been warned to reduce their exposure and alter their credit profile of the company.
We regularly publish lists of the latest insolvencies but by then it is too late. Our credit reports predict approximately 96% of company insolvencies long before they arrive.
Companies in trouble usually have very bad bad cash flow and they try to deal with it by delaying payment to their suppliers, increasing your exposure to them.
As a third party collector, we can get your payments prioritised over those who are not as hot on collections. When you customer receives a letter from the Credit Protection Association regarding their outstanding account, they are going to want to get that resolved as a priority. Our overdue account recovery service can get your unpaid invoices to the top of their “to do” list and get your invoice paid.
We got our members paid in full on every debt we had been asked to chase Johnston Press on up till now.
Our debt recovery and credit management services give our members the financial freedom needed to grow and prosper, while our new Late Payment Compensation department could unlock hidden potential and offer the compensation needed to springboard your business to success.
James Salmon, Operations Director, 19/11/18.
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