UK Edition
The Barclay family has regained ownership of The Telegraph after paying £1.2bn in debts owed to Lloyds Banking Group.
The high street lender said repayment had been made in full, meaning both The Telegraph and The Spectator magazine have been released from receivership.
Court proceedings brought on behalf of Lloyds against the Barclay family in the British Virgin Islands, which would have liquidated one of their key holding companies, have also now been called off. A hearing had been scheduled for Monday.
The move effectively ends Lloyds’ involvement in the complex sale of The Telegraph and The Spectator, with ownership of both titles spinning back to the Barclay family.
The repayment by the Barclay family was funded by a £1.2bn loan from RedBirdIMI, an Abu Dhabi-backed fund that plans to take control of the titles through a complex debt-for-equity swap.
However, Culture Secretary Lucy Frazer last week issued a “hold separate” order that prohibits ownership from being transferred to RedBird IMI until a public interest investigation is completed.
The order also prevents The Telegraph being merged with any other entity. In addition, it blocks any changes in management or the removal of key editorial staff.
Both The Telegraph and The Spectator will continue to be overseen by a trio of independent directors while the Government carries out its review, amid concerns about foreign state ownership and press freedom.
RedBird IMI is a joint venture between RedBird, a US private equity firm, and International Media Investments (IMI), an Abu Dhabi vehicle backed by the Manchester City owner Sheikh Mansour bin Zayed al-Nahyan.
IMI is providing 75pc of the £600m price for The Telegraph and The Spectator, though the bid is being fronted by former CNN chief Jeff Zucker.
The deal has sparked concerns given the UAE’s authoritarian leadership and track record of press censorship.
Senior figures including Lord Hague have called for the takeover to be blocked, while Tory MPs have written to Deputy Prime Minister Oliver Dowden urging him to intervene on national security grounds.
Ms Frazer has issued a Public Interest Intervention Notice (PIIN), which triggered investigations by the Competition and Markets Authority (CMA) and media regulator Ofcom.
Ofcom will examine the impact of the deal on the need for accurate presentation of news and free expression of opinion in newspapers, while the CMA will look at potential competition issues.
Both watchdogs have opened a call for evidence allowing interested parties to comment over the coming fortnight. They must report back to the Culture Secretary by January 26.
Rival suitors, whose bids were derailed by RedBird IMI’s swoop, are expected to lobby against the UAE-backed takeover in their responses.
They include a consortium led by the hedge fund founder Sir Paul Marshall and DMGT, the publisher of The Daily Mail.
Melanie Dawes, the chief executive of Ofcom, has recused herself from the review as she is married to Ben Brogan, the head of public affairs at Lloyds.
RedBird IMI has said it is committed to maintaining the editorial independence of the titles, adding that it would cooperate fully with the Government and regulators.
A spokesman for Lloyds confirmed that the Barclay debt had been repaid, adding: “We are always keen to work constructively with customers who get into difficulty with their repayments to reach an amicable solution. We’d like to thank all parties for their role in reaching this point.”
A spokesman for the Barclay family said: “We are pleased to have reached this positive resolution and are grateful to Lloyds Banking Group for their constructive engagement over recent months.”
Lloyds inherited the loans after buying Halifax Bank of Scotland, which lent the money to the Barclay family in the mid 2000s. The debt comprised a £700m loan plus £400m of interest run up.
The repayment marks a surprise windfall for Lloyds, which had written down the value of the loan on its books. Analysts expect Lloyds chief Charlie Nunn to use the money to fund a payout to shareholders at the company’s annual results in February.
Many of our readers have raised concerns over the potential sale of Telegraph Media Group to the Abu Dhabi-linked Redbird IMI. While Ofcom carries out its investigation, we are inviting the submission of comments on the process. Email salecomments@telegraph.co.uk to have your say.