Abu Dhabi fund's loan deal with Barclay for control of Telegraph and Spectator on hold
Lloyds Banking Group Plc seized the Telegraph titles from the Barclay family in June
Telegraph Media Group and the Spectator magazine have paused the formal sale process launched last month for the businesses, the newspaper publisher said on Tuesday.
The sale process will be paused until after the next British Virgin Islands commercial court hearing scheduled for December 4.
RedBird IMI had confirmed on Tuesday that it is supporting the Barclay family's attempt to reclaim ownership of the Telegraph, a loan package that includes an option to let it take control of the paper.
The media investment vehicle, which is a joint venture between RedBird Capital Partners and the United Arab Emirates-based International Media Investments, said in a statement Monday that it had agreed to loan the Barclay family 600 million pounds ($750 million), secured against the Telegraph newspaper and Spectator magazine.
Separately, IMI is set to lend a further 600 million pounds secured against other Barclay family businesses and commercial interests.
Lloyds Banking Group Plc seized the Telegraph titles along with the Spectator magazine from the Barclay family in June to claw back debts, removing Barclay family members from their director positions and placing the businesses in receivership. The RedBird IMI loan is aimed at paying the Barclay family debt owed to Lloyds.
The agreement details
"Under the terms of this agreement, RedBird IMI has an option to convert the loan secured against the Telegraph and Spectator into equity, and intends to exercise this option at an early opportunity," the investment vehicle said in a statement.
"Following transfer of ownership, RedBird Capital alone will take over management and operational responsibility for the titles under the leadership of RedBird IMI Chief Executive Jeff Zucker," the statement said, referring to the former president of CNN.
"International Media Investments will be a passive investor only."
According to their website, IMI's portfolio of assets include The National, Al Ain News, CNN Business Arabic, and interests in Sky News Arabia and Euronews.