LONDON (Brand Republic) - Richard Desmond, the proprietor of Express Newspapers, has almost halved the £97m loan he took out to fund the £125m acquisition of the newspaper group in November last year.
The funds are understood to have come from operating cash flow at Northern & Shell, Desmond’s privately owned holding company.
The news could help quash speculation that Desmond is in financial difficulties following the acquisition and unable to invest sufficiently in the Daily Express, which is falling well behind its rival The Daily Mail.
These reports have been fuelled by a gruelling cost-cutting strategy at the group which saw Desmond sell its websites for £1. He is said to have saved £30m by selling the sites.
Northern & Shell is also said to be locked in a financial dispute with Hollinger, publisher of the Daily Telegraph and co-owner with the Express Group of the West Ferry printing business.
Hollinger has agreed to buy the Express Group’s half of the printing business but the two companies cannot agree on a price. Desmond wants £80m for his half of the business, including the assets, printing contracts and a cash dividend. However Hollinger is unwilling to pay that amount and if agreement is not reached it will be decided in court.
Northern & Shell is also hoping to raise around £10m from the sale of Northern & Shell’s 41 soft porn magazines such as Asian Babes and Nude Readers’ Wives.
Desmond said recently that he is not interested in circulation figures at the Daily Express, which has seen its circulation drop to less than 1m. He is more concerned with profitability. He aims to grow Express Newspaper’s 2000 profit of £14m to £30m in 2001.