An investor is needed urgently to save the Sunday Business Post after a Dublin court allowed the newspaper to go into examinership.
The move was made after the Post’s sister paper The Irish Examiner was bought out by a new company in a deal with creditors led by AIB bank.
The Examiner and a number of local newspapers and radio stations have been bought by a new company called Landmark, led by the Crosby family who owned the Cork based publisher.
Landmark may yet emerge as new buyers for the Business Post after Justice Peter Kelly agreed to the appointment of Michael McAteer of Grant Thornton as interim examiner of Post Publications Ltd (PPL), which publishes the paper.
Lawyer Garvan Corkery for PPL told the court: “The company is loss-making and insolvent and has lost the financial support of its Cork-based parent group Thomas Crosbie Holdings (TCH) following a major restructuring of that company’s assets on Wednesday.”
He said this involved a new company called Landmark Media Investments Ltd, owned by Tom and Ted Crosbie, acquiring most of the assets of TCH.
The Irish Times reports that the Examiner deal did not include Post Publications Ltd (PPL), which had not guaranteed any of the liabilities of TCH and was not subject to a charge by the Cork media group’s main lender, AIB.
Landmark is believed to be interested in acquiring PPL from examinership.
Corkery outlined how PPL has been loss-making since January 2008.
It recorded a net operating loss of $1.5 million in the year ended January 1st, 2013, and is projected to record a loss of almost $2 million this year.
PPL has no debt but has relied on financial support from TCH for the past four years. This is now no longer available.
An independent accountant’s report compiled by David Carson of Deloitte has forecast that PPL can return to profit next year and has a ‘reasonable prospect of survival’ subject to certain conditions being met.
The report adds that court was told that the company’s own financial resources would be exhausted by week 13 of the examinership when a deficit of €164,795 would be recorded.
AIB has agreed to provide financial support of €150,000 at this point to enable PPL to see through its examinership.
The court was told a pay cut of 7 per cent along with 20 to 25 redundancies among the 76 staff is also likely.
The court was told that a failure to print the paper on Sunday could be ‘fatal’ for PPL.
A full examinership hearing will be held on March 15th.