26th Jul 2012 09:51
26th July, 2012 Daily Mail and General Trust plc (DMGT) Pensions Guarantee Structure
DMGT has created a contingent asset partnership arrangement (the Guarantee Structure) in collaboration with its principal defined benefit pension scheme, Harmsworth Pension Scheme (HPS). The Structure both provides HPS with a valuable contingent asset and is expected to manage the need for additional cash contributions to HPS in the medium term.
As part of the Guarantee Structure, on 25th July, DMGT's subsidiary, DMG Loanco, listed a £150m 7.45% Loan Note in Jersey, which is guaranteed by DMGT. Completion of the Guarantee Structure is expected by the end of the month. On completion HPS will release £45m DMGT Letters of Credit written in HPS' favour.
Under the Guarantee Structure, HPS receives a fixed annual amount of £10.8m derived from interest from the Loan Note until its maturity in 2026. Payments under the existing recovery plan will be reduced by an equivalent amount. The principal of the Loan Note is also paid to HPS but only to the extent that it is in deficit in 2026 (earlier if the Loan Note conditions are not satisfied). DMG Loanco is required to hold cash or intra-group loans receivable guaranteed by DMGT subsidiaries not otherwise linked to the scheme (the Guarantors). The Guarantors can be changed at DMGT's discretion provided the aggregate value of the guaranteed intra-group loans receivable plus any debts of the Guarantors do not exceed 3x the Guarantors' aggregate EBITDA. The initial Guarantors are RMS, Landmark, EDR, Trepp, Hobsons US and Ad:Tech Expositions.
In the medium term, the Guarantee Structure is expected significantly to reduce the need for potential funding payments to HPS that may arise following the next triennial valuation of HPS as at 31 March 2013. The Structure has no impact on DMGT's pension deficit for accounting purposes, net debt or profit & loss account.
Conformed copies of the Loan Note and other related public documents are available on www.dmgt.com
Investor/ analyst enquiries:
Stephen Daintith, Finance Director, DMGT +44 203 615 2902
Adrian Perry, Deputy Finance Director, DMGT +44 203 615 2910
Daily Mail and General Trust plc Northcliffe House, 2 Derry Street, London, W8 5TT Tel 020 7938 6000 Fax 020 7938 4626 www.dmgt.co.uk Registered in England and Wales No. 184594 Not for public release until 9.30 am on 26 July, 2012
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