Lloyds Banking Group has been urged by the Barclay family to postpone a court proceeding in the British Virgin Islands that could potentially lead to the liquidation of a significant holding company.
The former proprietors of The Daily Telegraph have made an effort to delay a court proceeding in the British Virgin Islands (BVI) that could have initiated insolvency proceedings for one of their principal holding companies.
Negotiations Over a Hefty Debt
As the two parties continue to negotiate the terms of a £1 billion debt owed to the high street lender, the Barclay family has been urging Lloyds Banking Group to reschedule a hearing that was originally set for later on Monday.
Aidan Barclay, the former chairman of the Telegraph titles’ holding company, reportedly led the efforts to adjourn the hearing, according to sources in the city.
Lloyds wishes for the potential liquidation of Penultimate Investments Holding Company (PIHC) to facilitate the flow of funds generated by the upcoming sale of the publications.
Lloyds could potentially sell the Barclay family’s debt without their consent in the event of a liquidation event at PIHC. However, there is no indication that the bank particularly inclines to pursue this course of action.
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Barclays’ spokesperson declined to provide further comments on Monday.
The court has scheduled the hearing to occur in the days immediately following the official commencement of an auction involving The Spectator current affairs magazine and the Telegraph newspapers.
According to sources, the BVI case was unrelated to the sale process as bidders awaited comprehensive financial information regarding the media assets.
Barclays had submitted an unprecedented proposal of £1 billion to recover the debt owed to Lloyds, with the expectation that it would persuade the bank to withdraw from the auction.
In recent days, Lloyds reportedly rejected the offer.
Rivals such as Lord Rothermere, the proprietor of the Daily Mail, the German media giant Axel Springer, and hedge fund billionaire Sir Paul Marshall also placed bids on the properties.
Barclays made the latest proposal several weeks after Lloyds received a proposal worth £725 million, demonstrating the family’s unwavering determination to regain control of two of the most influential newspapers in Britain.
Aidan Barclay, the nephew of Sir Frederick Barclay, the octogenarian who, with his late brother Sir David, orchestrated the acquisition of the Telegraph twenty years ago, presided over the newspapers until June.
For several years, Lloyds and Barclays had been engaged in negotiations regarding the refinancing of loans that HBOS had extended to them prior to the latter’s intervention in the 2008 financial crisis.
Bidder Competition and Unwavering Determination
Important details regarding the efforts of other bidders to take control of the broadsheet titles have emerged in recent weeks. Sir Paul, in particular, has sought the advice of former Daily Mail and General Trust chief executive Paul Zwillenberg and the support of fellow hedge fund magnate Ken Gryphon.
National World, the publicly traded organization led by former Mirror newspaper chief David Montgomery, has engaged the services of consultants to develop a proposal. Additionally, former Daily Telegraph editor Sir William Lewis has been actively seeking potential investors.
Additionally, the German publisher Axel Springer, which is overseeing the auction on behalf of Goldman Sachs, has expressed interest in participating.
A transfer at the initially proposed price of £600 million or more would subject Lloyds to a significant writeback, as the bank had previously written down the value of its loans to Barclays several years ago.
The family’s Lloyds debt may involve funding from Barclay’s online retailer Very Group.
A New Group of Directors Takes Charge
A new group of directors, led by the boardroom veteran and chairman of Openreach and IG Group, the financial trading firm, Mike McTighe, is overseeing the sale.
Mr. McTighe is the chairman of Press Acquisitions and May Corporation, which owns TMG and The Spectator (1828).
