Fears were mounting last night for the future of Highbury House Communications, the struggling magazine publisher controlled by the former Sun editor Kelvin MacKenzie.
A statement from the Alternative Investment Market-listed company said it had asked for trading in its shares to be suspended after debt refinancing talks were terminated.
The statement went on to say discussions continued with lenders, which remained supportive. "The future viability of the group is dependent on the successful conclusion of these discussions," Highbury House added.
Mr MacKenzie installed himself as chairman and chief executive in September after it emerged he had shelled out £1.3m of his £7m windfall from the sale of Wireless Group, which he led, to pick up about one-fifth of the shares. The ailing company, which is home to the lads' mag Front, computer games titles and hobbies magazines, has been working hard to avoid going bust.
The company, valued at only £2.2m, is staggering under £27m debts. It had been looking to swap debt for equity. That debt is held by Barclays, Royal Bank of Scotland and Allied Irish Banks.
Highbury was forced to restructure the business after competition regulators blocked its £96.5m acquisition by its rival The Future Network. Instead, Future snapped up most of Highbury's best-selling titles for £30.5m. Highbury later sold its South African titles.
The shares, which have tumbled from 3.4p since Mr MacKenzie's arrival at the Bournemouth-based company in August, were suspended at 0.7p.
His arrival precipitated a boardroom shake-up that saw the departure of the chief executive Mark Simpson and Mike Frey, the chief operating officer tipped to take over. Simon Neathercoat stepped down as non-executive chairman after just 12 months in the role.
Industry observers compared Mr MacKenzie's manoeuvre to the boardroom coup staged by the French corporate raider Vincent Bolloré, who gained control of the advertising group Havas this year without launching a takeover bid for the whole company. His 22 per cent stake was enough to install himself as chairman.
Highbury House declined to comment yesterday.Reuse content