Shareholders of the ailing ThisDay newspaper are in last-ditch negotiations with potential investors to rescue the daily from closure.
There are about 15 possible investors, ThisDay chairperson Nduka Obaigbena told journalists in Johannesburg on Tuesday afternoon.
Obaigbena, who is also the owner of ThisDay in Nigeria, would not reveal details of the negotiations with potential investors, but hinted that there was a possibility SA’s youngest daily newspaper could soon be in control of South African hands.
“There is a possibility,” he said. “Meetings are ongoing with enthusiastic shareholder groups and [a] decision on a strategic and financial partner for [the] current shareholder will be announced once negotiations are concluded.”
Absa Corporate Merchant Bank is brokering talks with the potential investors.
ThisDay did not publish on Tuesday following a decision by Caxton to stop printing the newspaper amid mounting debts.
There is speculation that the newspaper’s management has a target to retrench 50% of its staff to make it more attractive to investors, according to a source close to the newspaper.
Obaigbena would not confirm or deny any the speculation, saying only that the newspaper had suspended operations until Monday, when a decision “on how to proceed” would be taken.
“We have taken a step back to review [the situation] and clear the debt so we can start on clean slate,” he said.
In the meantime, ThisDay was squaring off some its debts to staff and creditors to keep it afloat while it lures a new investor, said Obaigbena.
“A comprehensive plan to deal with all debts by ThisDay newspaper has been put in place and all debt to staff and other creditors will be cleared over the next few weeks.”
The newspaper’s landlord, Rand Merchant Bank, had been owed two months in rent but had been paid earlier on Tuesday.
Obaigbena said that staff had been paid their outstanding September salaries on Tuesday morning and their October salaries would be paid by Monday.
He also promised staff to settle the R2-million deficit in pension funds and the outstanding amounts to their medical aid scheme by Monday.
He declined to say where the funds to clear these debts had come from, but he did confirm that shareholders were committed to keeping the newspaper afloat.
A Sapa news agency report earlier on Tuesday quoted a source in the newspaper industry as saying that Obaigbena had been to Nigeria this week, where he managed to raise $3-million to save the South African project.
Media reports have said that ThisDay reportedly owed R14-million in unpaid income taxes, about R4-million to its newsprint supplier, Mondi, and close to R700 000 in outstanding rent.
But Obaigbena disputed these figures on Tuesday, saying “not more than two to three million rand” was owed to creditors.
He attributed most the “debt that hit the headlines” to the ThisDay media stores, formerly CNA, but said shareholders took a decision to pay the debt rather than liquidate the stores.
Despite the financial pressures, Obaigbena asserted that ThisDay‘s Nigerian shareholders were committed to the newspaper, commenting: “We have so far invested R170-million in South Africa and will over the next three months, while we negotiate with potential investors, continue to invest millions more”.
The Nigerian-owned daily launched in SA in October last year. – I-Net Bridge