(Bloomberg) -- Receivers at Alix Partners have seized shares of the parent company of the Daily Telegraph on behalf of lender Lloyds Banking Group Plc after talks over its debts faltered.
A Bermuda-based company that is the ultimate owner of the Telegraph Media Group, controlled by the Barclay family, was taken over by receivers on Wednesday, according to a person familiar with the matter, who asked not to be named because they are not authorized to talk about it.
Relations between the owners of Telegraph Media Group and its lender have deteriorated recently, with Lloyds increasingly frustrated by the lack of progress around repayment of the debt, the person said.
The Barclay family is known for the sprawling business empire built by twins David and Frederick that spanned retail, media and some of the world’s most prominent hotels. The brothers bought the Telegraph group in 2004, which included the Daily Telegraph and the Sunday Telegraph, for £665 million ($829 million).
“The loans in question are related to the family’s overarching ownership structure of its media assets,” a spokesperson for the family said in a statement on Tuesday. “They do not, in any way, affect the operations or financial stability of Telegraph Media Group.”
The spokesperson declined to comment on the seizure of the shares on Wednesday. A representative for Alix Partners declined to comment.
Operating profit at the newspaper arm jumped 25% to £33.3 million in 2021, beating pre-pandemic numbers. Sales grew 4% to £245 million with about 7 million registered users and more than 750,000 subscribers.
The businesses “within our portfolio continue to trade strongly, are run by independent management teams, are well capitalised with minimal debt and strong liquidity,” the statement also noted. “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 is said to be lining up bankers as it looks to pursue a potential auction of the Telegraph newspapers, Sky News has reported.
A representative for Lloyds declined to comment.
The lender inherited the loans to the family after taking over Bank of Scotland, which it bought as part of a state-brokered rescue of HBOS during the financial crisis.
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The Times of London reported the news earlier.
--With assistance from Luca Casiraghi.
(Adds seizure of shares from first paragraph.)
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