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Abu Dhabi-backed RedBird IMI has supplied to take management of the Telegraph and Spectator below a deal to repay the debt owed by the Barclay household to Lloyds Banking Group.
RedBird IMI, the funding group run by former CNN boss Jeff Zucker, mentioned on Monday it had agreed to offer funding to the Barclay household to repay the £1.1bn of loans “in full” to Lloyds and “bring the Telegraph and Spectator out of receivership”. The UK lender seized the UK newspaper group final summer time.
International Media Investments, the funding car backed by Manchester City proprietor Sheikh Mansour bin Zayed Al Nahyan, would even be concerned in about half of the deal’s debt financing.
RedBird IMI mentioned if the deal have been to go forward, it supposed to train an choice to convert debt into possession of the newspaper group at “an early opportunity”.
If Lloyds agrees to the proposal, the deal will mark the tip of the Barclay household possession of the nationwide newspapers after 20 years.
On Monday, the lender requested a court docket within the British Virgin Islands to adjourn till early December a listening to that would have liquidated the final of the Barclay household’s holding corporations. It remains to be continuing with a separate public sale course of to promote the newspaper in addition to sister publication the Spectator journal.
As a part of the proposed deal, Sheikh Mansour’s IMI could be left with a major debt holding within the final remaining main enterprise belongings held by the Barclay household. This consists of the Very retail and monetary companies group, based on individuals accustomed to the discussions.
The deal can be structured as a £600mn mortgage secured towards the Telegraph and Spectator from RedBird IMI. International Media Investments will present a separate mortgage of an identical quantity secured towards different Barclay household companies and industrial pursuits.
This would stability out the distinction between the £1.1bn supplied to repay the Lloyds debt in full, and the £600mn fairness worth of the Telegraph group, based on individuals accustomed to the talks. It is just the £600mn mortgage towards the Telegraph that might be transformed into fairness.
Conservative MPs have urged ministers to make use of the nationwide safety act to analyze the deal given their fears of affect by Abu Dhabi over the editorial crew at a newspaper that’s historically near the celebration’s pursuits.
RedBird has supplied assurances that the Telegraph can be editorially unbiased to keep away from regulatory investigations. US-based RedBird Capital “alone will take over management and operational responsibility for the titles under the leadership of RedBird IMI chief executive Jeff Zucker”, it mentioned, including: “International Media Investments will be a passive investor only.”
It mentioned that RedBird IMI was dedicated to sustaining the prevailing editorial crew of the Telegraph and Spectator publications, and wished to develop the attain of the titles “in the UK, the US and other English-speaking countries”.
Telegraph journalists have raised issues about editorial independence, based on a memo despatched to workers by editor Chris Evans on Monday. “At the moment I know no more than you will have read,” Evans wrote.
People near the talks mentioned that Lloyds wanted to hold out its personal checks and due diligence earlier than agreeing to the proposal.
One particular person with information of the financial institution’s place mentioned it wished to ensure the deal was viable earlier than negotiating solely with the Barclay household. Previous, however decrease, provides have been rebuffed by the financial institution.
However, the choice has angered some bidders given months of labor and the price of pulling collectively bids for the newspaper group. Those who’ve registered an curiosity embody Paul Marshall, the hedge fund billionaire, and media teams News UK and DMGT.
An individual near one of many bidders mentioned the Barclay household was making an attempt to “hand two treasured media assets to an autocratic government without regulatory scrutiny”, including: “This is a heist taking place in full daylight.”
