RedBird IMI said it will fully pay off the debts owed to Lloyds Banking Group (Representational)
London:
An investment fund linked to Abu Dhabi, RedBird IMI, has announced its intention to take control of The Daily and Sunday Telegraph newspapers and The Spectator magazine in Britain.
The joint venture, RedBird IMI, has struck a deal for a “package of loans” worth £600 million ($750 million) to acquire the Telegraph Media Group.
The Barclay family, which has controlled the parent company of these right-leaning titles for nearly two decades, put it up for sale earlier this year due to unpaid debts. RedBird IMI will fully pay off the debts owed to Lloyds Banking Group, thus allowing the media group to be taken out of receivership.
The joint venture also plans to convert a “similar” sized loan secured against the Telegraph and Spectator titles into equity, ultimately giving it ownership of the Telegraph Media Group.
Redbird Capital, headed by former CNN president Jeff Zucker, will oversee the publications independently, with IMI playing a passive investor role only, according to the joint venture.
Government appeal
A group of lawmakers from the ruling Conservative party has urged the UK government to investigate Abu Dhabi’s role in the takeover using national security laws, as reported by the Financial Times. Five Tory MPs have written to key government officials questioning the wisdom of allowing overseas sovereign wealth funds to acquire national newspapers.
Announcing the financial deals, a spokesperson for RedBird IMI stated that it will “provide a loan to the value of £600 million, secured against the Telegraph and Spectator”.
The spokesperson emphasized that any transfer of ownership will be subject to regulatory review and that they will continue to cooperate fully with the government and the regulator. Following the transfer of ownership, RedBird Capital alone will assume management and operational responsibility for the titles under the leadership of RedBird IMI chief executive Jeff Zucker.
The joint venture is committed to maintaining the existing editorial team of the Telegraph and Spectator publications to protect their reputation and credibility, the spokesperson added.
Telegraph Media Group was acquired by twin brothers Frederick and David Barclay in 2004 for £665 million. However, in June, lender Bank of Scotland appointed a receiver for the group’s Bermuda-based holding company due to “debts being in default and with no sign they would be repaid”.
It was described as a “last resort” following unsuccessful discussions to “find a consensual solution and repayment” of the borrowing, which reportedly amounted to £1 billion ($1.2 billion).
(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)
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