Cooke's €750,000 deal saves 'Business Post' from collapse
Ex-'Star' executive and Key Capital reach last-minute agreement
Published 08/06/2013 | 05:00
A CONSORTIUM of Key Capital and newspaper executive Paul Cooke (pictured) has reached agreement in principle to buy the 'Sunday Business Post' newspaper from its court-appointed examiner Michael McAteer.
The offer is to buy the business for €750,000 which will be used to pay off debt. The takeover plans are understood to include proposals for further investment in the business once the acquisition is completed.
Paul Cooke is a former managing director of Independent Star Limited – the company that publishes the 'Irish Daily Star' newspaper.
Key Capital is an Irish finance house led by Conor Killeen, that acts as an investor in its own right as well as a financial advisor to businesses and wealthy clients. In the case of the 'Sunday Business Post' Key Capital is understood to be investing on its own behalf.
The finalised proposal to buy the 'Sunday Business Post' was made just ahead of a looming deadline of midnight last night. If the deadline had been missed, the newspaper was set to collapse into liquidation.
The company behind the 'Sunday Business Post' was put into examinership, after most of its parent group Thomas Crosbie Holdings went into receivership in March.
An initial plan by some members of the Crosbie family to buy back the newspaper in conjunction with the 'Irish Times' was shelved, however, after the business had gone into examinership.
It left Grant Thornton accountant Michael McAteer to implement radical cost cuts, including nine redundancies in a scramble to draw in alternative bidders. In the end, the Paul Cooke-led offer edged out rival bids led by two other media executives, Frank Cronin and Michael Brophy. Under terms that were still being finalised last night, staff at the newspaper were forced to agree to sacrifice their right to previously agreed redundancy terms in order for the deal to go ahead.
It means anyone losing their job in future will only be entitled to the statutory minimum redundancy package set out in law, which is capped at €1,200 per year of service.
Nine of the 75 staff at the 'Sunday Business Post' who have agreed to accept redundancy packages in recent weeks will see their payouts reduced to one-and-a-half times the statutory rate instead of double the rate as previously agreed.
In exchange for agreeing to change the redundancy conditions, staff have been offered a 6pc stake in the newspaper, which will be owned through an employee shareholder trust.
Staff at the newspaper were called to a meeting yesterday to be told of the offer and given just hours to agree to the new terms. Once the deal has been formally agreed by the examiner and the buyers, it will be put to a vote at a meeting of creditors, which is likely to take place next Friday.
That will clear the way for an agreed scheme of arrangement to be presented to the High Court the following Monday.