The proposed rescue deal for the Sunday Business Post is likely to involve a €1.2 million investment and cuts of about 30 per cent in the cost of running the business.
Finance house Key Capital and businessman Paul Cooke yesterday agreed the outline of a deal with examiner Michael McAteer to buy the Sunday title, which has been under High Court protection from its creditors for the last three months.
It is understood that the deal involves an up-front payment of €750,000, which will go to creditors and to cover the examiner’s costs, and further spending of about €500,000.
Mr McAteer will ask creditors at a meeting next week to approve a scheme of arrangement designed to clear its obligations to them and enable it to emerge from examinership with a clean sheet.
If they agree, it will then be put to the High Court for final approval.
The deal is likely to involve cuts amounting to 30 per cent of running costs, with rent, printing and labour all targeted.
It was not clear last night how many lay-offs are likely to be involved.
Post Publications, which publishes the newspaper, employed 76 full-time staff when it entered examinership, but Mr McAteer recently told the High Court that he had sought nine voluntary redundancies.
Staff will get a 6 per cent share of the business through an employee share option trust. In return, they have been asked to sign waivers limiting redundancy claims to their statutory entitlement should they be laid off.
The 100-day High Court protection period is set to run out next Friday. While talks between the investors and Mr McAteer were continuing yesterday, the deal will have to be finalised early next week to allow for both the creditors’ meeting and court hearing.
The High Court appointed Mr McAteer, a partner with accountancy firm Grant Thornton's insolvency division, three months ago after Post Publication's parent, Thomas Crosbie Holdings, publisher of the Irish Examiner, went into receivership.
Eight parties
Up to eight parties are understood to have expressed interest in buying the Sunday paper over the past three months. Mr McAteer had narrowed this down to three by last week.
The basic elements of the deal put forward by Key Capital and Mr Cooke, were agreed early yesterday.
Mr Cooke, an accountant by profession, is an experienced newspaper executive.
Up to last year, he was managing director of the Irish Daily Star, the joint venture between Independent News and Media and the Richard Desmond-owned Northern & Shell. Before taking that role he was the company's financial controller. Key Capital is a corporate finance and wealth management specialist, led by founder and chief executive, Conor Killeen. The firm has offices in Dublin and London.
It was most recently in the news last month when it was one of a group of investors who bought the “project Aspen” loan portfolio from State assets agency, Nama, for €200 million. The portfolio includes Harcourt Street Garda Station in Dublin.
