The offer was received at the last minute and needs to be studied, Métro Média’s bankruptcy trustee writes in a report.
Author of the article:
La Presse Canadienne
Pierre Saint-Arnaud
Published Oct 19, 2023 • 2 minute read
Although Métro Média’s newspapers have ceased operations, a buyer has come forward to the trustee in charge of managing the company’s bankruptcy.
The report from trustee Stéphane De Broux of KPMG, dated Wednesday, indicates that at the deadline for the call for tenders last Tuesday, “KPMG received an offer from a potential buyer. The latter must be studied by the committee of inspectors appointed at the first meeting of creditors.”
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No information has filtered as to the value of the offer or whether it targets all of the newspapers of the Métro Média group, which published the Métro newspaper, 20 community newspapers in Montreal and eight others in Quebec under the Métro brand. The group had purchased them in April 2018 from TC Transcontinental.
The bankruptcy of Métro Média, announced on Sept. 28, led to the layoff of just over 70 employees, approximately half of whom worked in the company’s newsroom.
The bankruptcy was blamed on the decision of the city of Montreal to prevent distribution of flyer bag Publisac, which was the main distribution vehicle for its newspapers, and to limit flyer distribution to residents who requested it.
This decision, announced in 2022, came into force in May 2023, causing a “significant and sudden drop in advertising revenue,” the report says.
As early as July, Métro Média had mandated the firm MCE to carry out a study on the financial viability of an entirely digital transformation of newspapers, until then printed on paper, and to define a strategy to attract financing.
Both Investissement Québec and Desjardins Group had rejected the idea of continuing financing. They are now the only two secured creditors in this bankruptcy, the first to the tune of nearly $900,000, the second to more than $383,000, for a total of just over $1.28 million in secured claims.
Unsecured creditors, meanwhile, represent a debt of $1.137 million on the company’s financial statement. The Ministry of Culture and Communications is the largest of these creditors, with just under $555,000, followed by employees, who are owed almost $200,000.
With assets of just over $2 million receivable in tax credits, the net balance sheet is a deficit of just over $500,000.
However, to this is added a debt “which is not recorded in the bankruptcy balance sheet,” the report says, namely a claim of $1.275 million for a “repayable grant granted in 2023,” received on Oct. 2, after the production of the bankruptcy report.
Reimbursement of the subsidy is being demanded by the city of Montreal.
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