(Reuters) - Britain's Johnston Press (L:JPR), publisher of The Scotsman, The Yorkshire Post and "I" newspapers, said on Friday it would file for administration, a form of creditor protection, and then be sold to its bondholders, allowing it to continue to trade.
Last month Johnston Press put itself up for sale after it reviewed its finiancial situation, which included a large debt repayment due next year. The group has struggled with tough conditions in the publishing market.
That sale process ended on Friday with the company concluding its equity had no value. It said administration and subsequent sale to a group of companies controlled by the holders of the bonds was the best remaining option.
"It will preserve the jobs of the group's employees and ensure that the group's businesses will be carried on as normal," Johnston Press said, adding that it hoped the transfer would be completed within 24 hours.
The Telegraph newspaper reported that the new holding company is controlled by the New York hedge fund GoldenTree Asset Management. It said restructuring specialists AlixPartners would handle the administration.
Johnston Press said its defined benefit pension scheme would not transfer to the new entity.
It said the Pension Protection Fund (PPF), an industry-funded lifeboat for ailing schemes, would be notified and the PPF, with the assistance of the scheme's trustees, would then assess whether the scheme needs to enter the PPF.