Telegraph Forced To Write Off Black’s Loan Of £145 Million

According to the Times, the write-off for the newspaper group, which amounts to four years profits, results from a loan between the Telegraph and Hollinger International, the US based company controlled by Lord Black. The loan was set up following the 25% sale of Australian publisher, John Fairfax, for £275 million in 1996.

Lord Black’s proceeds from the Fairfax sale were paid to the Telegraph in the UK but the cash was then transferred to Hollinger International’s LHAT Corporation. In return, a special Telegraph subsidiary called Deedtask received preference shares in LHAT as compensation.

It was agreed that the preference shares issued to Deedtask would pay interest but no interest was ever received. Deedtask is now owed £53.3 million of interest from LHAT.

Since Lord Black no longer sits on the board of the Telegraph, the groups remaining directors said, they could no longer justify a book value of £178 million for Deedtask and as a result this has been cut by £145 million.

Earlier this week, the Office of Fair Trading invited third-parties to comment on the acquisition of the Daily Telegraph by the Barclay brothers but Patricia Hewitt, the Trade Secretary of State, said that she saw no public interest reasons why the sale should be blocked.