Guardian owner to write down Emap investment 'by up to £200m'

Guardian Media Group (GMG), owner of The Guardian and The Observer newspapers, is set to take a significant hit on its investment in publisher Emap, sending it to an annual loss for the second year in a row.

The group is expected to write its investment down by between £100m and £200m in the form of a non-cash impairment because of the difficult market conditions.

GMG is currently in talks with its auditors PricewaterhouseCoopers over its annual impairment review. A source closer to the situation said the exact size of the impairment had not yet been determined but would be settled by its financial year end at the end of the month.

The write down will push GMG to a larger full year loss than last year, the source added. Last year, the group suffered a pre-tax loss of £90m as the media sector was hit by the downturn advertising.

It paid £300m when it teamed up with private equity group Apax Partners to buy the publisher in 2007. Apax has already written its stake in Emap down to zero.

The Guardian sold its regional titles including the Manchester Evening News last month to Trinity Mirror in a deal worth £44.8m in cash and the termination of its printing contract with Trinity.

GMG chief executive Carolyn McCall said they had sold off their local titles to safeguard the future of The Guardian. The group is slashing costs which has included axing jobs and closing supplements at The Observer.