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Lloyds threatens to push Telegraph owner into receivership

The owner of the Telegraph Media Group has been threatened with receivership by lender Lloyds Banking Group over a longstanding debt owed by the parent company controlled by the Barclay family.

AlixPartners, the restructuring group, has been lined up to act as receivers of Press Acquisitions, which controls the Telegraph newspapers, if Lloyds decides to take action against the operating companies for not paying off a decades-old debt, according to two people with knowledge of the situation.

It is not clear how much money is owed by the group to Lloyds, although one person close to the talks described it as in the “hundreds of millions of pounds”. A repayment deal could still be struck, according to the person, but he added that Lloyds’ patience over the debt was running out.

The debt goes back to loans made by Bank of Scotland in the financial crisis that were assumed by Lloyds after it acquired the bank. The bank has charges over assets of the company given the Bank of Scotland loans.

One person close to the negotiations said: “This is about historic finance and not about the performance of the Telegraph. This is a longstanding issue between the family and LBG over a legacy HBOS loan. The banker has shown forbearance for a number of years but has finally had enough.” 

Press Acquisitions is owned by May Corporation, a Jersey entity controlled by the Barclay family. Sir Frederick and the late Sir David Barclay acquired the newspaper in 2004, and also own online retail business Very Group. The move by Lloyds to line up receivers was first reported by The Times.

A spokesperson for the Barclay family said: “The loans in question are related to the family’s overarching ownership structure of its media assets. They do not, in any way, affect the operations or financial stability of Telegraph Media Group.”

But he added that “speculation about the business entering administration is unfounded and irresponsible”.

He said that the businesses continued “to trade strongly, are run by independent management teams, are well capitalised with minimal debt and strong liquidity. They have no liability for any holding company liabilities, continue to operate as normal and are unaffected by issues in the holding company structure above them.” 

Lloyds declined to comment. AlixPartners declined to comment.

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