LONDON: Mecom Group, the debt-beset European newspaper group run by controversial former Trinity Mirror chief executive David Montgomery (pictured), has finally succeeded in unloading its German assets onto one of the nation's longest established publishers.
Among the several titles sold to family business M DuMont Schauberg for €152 million ($203.59m; £136.13m) are Berliner Zeitung and Hamburger Morgenpost. Together, the job lot comprises around €20m of Mecom's estimated 2008 EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) of €163m.
The German properties, acquired in October 2005, have been a thorn in Mecom's side almost since day one, German trades unions being unaccustomed to the iron-fisted staffing practices of their new proprietor – dubbed by UK newspaper The Observer "the most-hated manager in British journalism".
But Montgomery's standoff with the unions was not the main trigger for the sale. Rather it was the firm's highly leveraged debt situation, currently hovering at around €650m.
According to the Financial Times, Mecom had been in danger of breaching its banking covenants – a problem resolved by the sale, for the time being at least.
The buyer – a family-owned business that traces its publishing roots back to 1620 and has published newspapers in Cologne throughout its turbulent history since 1805 - is of a very different ilk to ruthless cost-cutter Montgomery.
For once, the unions will be as delighted by a deal as the moneymen.
Data sourced from Financial Times; additional content by WARC staff