Lord Black, chairman of Hollinger, may be forced to sell assets to avert the collapse of his publishing group following a failed attempt to restructure company debts.
Last month, Hollinger, the parent company of
The Daily Telegraph, called on preference shareholders to agree to a deferment of redemption on the basis that it could not afford to pay out if they all requested their money at once.
It was proposed that in return for allowing the payment date to be pushed back four years to 2008, shareholders would see their annual dividend rise from 7% to 8%. Hollinger remains heavily in debt and this move would have given Lord Black time and space to implement a refinancing strategy.
In the event, less than half of preference shareholders gave their support to the plan and it has subsequently been shelved. Lord Black will now have to consider selling Hollinger businesses, which, like the Telegraph Group (see Telegraph Group Sees No Upturn In 2003) have borne the brunt of the advertising recession
The chairman is already under pressure from shareholders after it emerged that he and other directors had accepted large payments relating to the disposal of newspaper interests over the past few years.
