SBP examiner given more time for rescue plan

Tuesday 09 April 2013 23.12
The Sunday Business Post employs 76 people with an average of 120 freelance contributors
The Sunday Business Post employs 76 people with an average of 120 freelance contributors

An examiner appointed last month to Post Publications, owners and publishers of the Sunday Business Post, needs more time to devise a rescue plan for the paper.

The Commercial Court granted an extension to 15 May for the preparation of a plan after hearing there were "serious contenders" for investment in the newspaper.

Senior Counsel Rossa McMahon said three of the paper's four main creditors were consenting to the extension.

He said more time was needed to formulate a scheme of arrangement and the examiner, Michael McAteer, remained confident the business had a reasonable prospect of survival.

The company was performing better than had been forecast during the examinership period and there had been expressions of interest from 11 potential investors.

He agreed with Mr Justice Peter Kelly that four of these were "serious contenders".

Those potential investors needed time to carry out due diligence before any firm negotiation could begin on the amount of investment on offer, the court was told.

Until then a scheme of arrangement or rescue plan could not be finalised.

Efforts were continuing to reduce printing and rental costs that were above market rates, according to a report handed in to court. Cash flow was performing ahead of projections.

Mr Justice Kelly said he was satisfied progress had been made and granted an extension of the examination period to 15 May.

A creditors meeting is to be held on 3 May at which a rescue plan is expected to be presented.

The Sunday Business Post employs 76 people with an average of 120 freelance contributors.

Up to 25 voluntary redundancies may be sought by the end of this year.

It has a readership of 140,000 accounting for 10% of the overall Sunday broadsheet market.

At a hearing last month the court was told until the recent failure of Thomas Crosbie Holdings, it was part of a leading Irish media business and was funded by the TCH group through borrowings from Allied Irish Bank.

This funding could no longer continue, but the bank had pledged to support Post Publications during the examinership period.

It suffered a drop in revenue of 53% between 2007 and 2012 from €15.6m to €7.3m.

The cause was largely due to a drop in advertising revenue, which fell by 68% during that time.

The total advertising spend in the Irish market dropped by 51% between 2007 and 2011.

The paper also suffered a drop in circulation revenue of 26%, from €4.9m in 2007 to €3.69m.