Hollinger Directors Insist on Fairness Test for Debt Plan

22 August 2003

Independent directors of global newspaper publisher Hollinger International refused to approve a debt plan without an “independent fairness opinion”, it emerged this week.

The scheme in question involved a $20.4 million (€18.5m; £12.9m) loan Hollinger made to its parent, Hollinger Inc, in 2000. In April this year, the publisher announced it would offset most of this debt against money it owes to Ravelston, a privately held company belonging to Lord Conrad Black – Hollinger’s chairman and ceo. In effect, this meant that Hollinger Inc would owe $15.7m to Ravelston and $4.7m to Hollinger.

But in a regulatory filing earlier this week, the company revealed that its independent directors had refused to approve the deal without “appropriate due diligence” and an external assessment of whether it was fair.

The news comes at a sensitive time for Hollinger – owner of Britain’s Daily Telegraph, the Jerusalem Post and the Chicago Sun-Times among others – as it coincides with internal investigations of management fees paid to Black, other Hollinger directors and Ravelston. Indeed, the directors’ demands may be a sign that the board is now scrutinising the group’s dealings more closely.

Data sourced from: Financial Times; additional content by WARC staff