The High Court has approved a €750,000 takeover bid for the Sunday Business Post.
The rescue plan for the troubled weekly newspaper will see 9 voluntary redundancies and wage cuts of 6% for the remaining 65 members of staff.
Two factors helped sway Mr. Justice Peter Kelly's decision in favour of approving the survival plan proposed by examiner Michael McAteer. The first is that since the insolvent newspaper business went into examinership last March it has produced better than expected results.
Confidential material involving projections on the future of the restructured company also gave comfort to the court that the business can return to profitability.
Mr. McAteer made no secret of the fact that he had hoped for a larger investment than €750,000.
But the court heard despite significant interest it proved difficult to secure a deal as the company had been losing money for 4 years and was a marginal investment prospect.
Mr. McAteer is now satisfied €750,000 is sufficient for the newspaper’s survival. He attributes that to the significant cost cuts achieved.
Some unsecured creditors including Irish Life which is due nearly €2 million, have agreed to a 97.5% write down on what they are owed.
To ensure their continued goodwill, journalists who contribute to the newspaper have done slightly better and will recover 15 % of their debts. No class of creditor opposed the proposed survival package.
Rossa Fanning, BL, for the examiner, told the court there have been 9 voluntary redundancies. The remaining 65 members of staff, he said, were faced with a stark choice of 6% pay cuts or unemployment.
They took the salary reduction in exchange for a 6% interest in the business. Mr. Fanning called it a ‘rational economic decision’ from a ‘sophisticated workforce’.
Wrapping up proceedings, Mr. Justice Kelly said the continued employment of staff members was of great concern; all the more so given the current dismal unemployment rates in the country.
