The Abu Dhabi-backed investment fund RedBird IMI has said it is to take control of the Telegraph and Spectator publications after agreeing loans to repay debts owed by the publishing group’s previous owners, the Barclay family.
The deal would see a joint venture between the US firm RedBird Capital and International Media Investments of Abu Dhabi provide loans to the family, allowing them to pay off their debts to Lloyds Banking Group and take back the titles within weeks.
However, sources close to the situation said the titles’ auction – which kicked off earlier this year after the Barclays lost control of the group over £1.16bn of unpaid debts owed to Lloyds – was continuing.
It emerged last week that the family intended to fully repay their debts with funding from Abu Dhabi. However, Conservative MPs voiced concerns at the weekend over the danger of foreign influence, asking the government to use national security laws to investigate potential risks around the bid.
RedBird IMI said on Monday it had “reached an agreement to provide a package of loans to the Barclay family allowing them to pay off their debt to Lloyds Bank in full and bring the Telegraph and Spectator out of receivership”.
The agreement would see RedBird IMI provide a £600m loan, secured against the Telegraph and Spectator, and “a loan of a similar amount secured against other Barclay family businesses and commercial interests”.
RedBird would then have an option to convert the loan secured against the Telegraph and Spectator into equity, and said it “intends to exercise this option at an early opportunity”.
“Any transfer of ownership will of course be subject to regulatory review and we will continue to cooperate fully with the government and the regulator,” it said.
It is understood that if the Barclays family can prove they can pay in full by early December, Lloyds will be obliged to accept.
The deadline for first-round bids in the auction process is next week, on 28 November.
The spokesperson for RedBird IMI added: “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. International Media Investments will be a passive investor only.
“RedBird IMI are entirely committed to maintaining the existing editorial team of the Telegraph and Spectator publications, and believe that editorial independence for these titles is essential to protecting their reputation and credibility.
“We are excited by the opportunity to support the titles’ existing management to expand the reach of the titles in the UK, the US and other English-speaking countries.”
The Barclay family and Lloyds Banking Group declined to comment.