City AM owed upmarket hotels more than £200,000 before its £1.5m acquisition by protein shake tycoon Matt Moulding.
The London freesheet , which Mr Moulding’s THG purchased last month, collapsed into bankruptcy owing more than £2.4m.
Boisdale is a Scottish themed fine dining restaurant with a whisky bar in Canary Wharf, and Belgravia.
City AM is closely connected to the chain. It owes £36,000 to them for hosting an event celebrating cryptocurrency. Harry Owen, former chief operating office of the newspaper, is now executive Director at Boisdale, and the company hosted its Christmas parties there.
The newspaper also owed over £100,000.00 to the Leonardo Royal Hotel, St Paul’s where it had previously held award ceremonies.
City AM’s biggest debt is almost £1m due to HMRC in relation to VAT, payroll and employee’s national insurance. This is expected to be paid back fully. The company owes Metro Bank £750,000, of which up to 75% is expected to recover.
The bankruptcy filings of BDO’s administrator reveal the financial state of the Freesheet before its collapse.
Covid lockdowns decimated the newspaper’s advertising revenue and its main readership, London commuters.
City AM was forced to stop printing due to the crisis in 2020. While the newspaper is back in circulation, the costs of newsprint and the shift towards home-working have caused it to be hit. It is no longer printed every Friday.
The company’s revenues increased to £6.1m in the last year. However, it lost another £584,000. Its debts also grew to £2.5m.
Early this year, the bosses reached an agreement in principal with an investor to receive additional funds in exchange for 25pc of the business.
Negotiations broke down, and City AM agreed to a pre-package administration deal worth £1.5m with THG. THG owns brands such as Lookfantastic or Myprotein.
City AM was so financially stretched in July that it could not pay its employees or critical suppliers.
THG transferred £92,500 in order to cover the payment.
The industry has been surprised by THG’s acquisition of City AM, given Moulding’s past tirades against the City of London and the media.
Sources within the industry have stated that City AM would remain editorially neutral, while also highlighting THG’s potential commercial opportunities.
City AM has reportedly hired for a dozen additional roles, increasing its workforce almost by a third. It also purchased new equipment.
THG plans to also use its digital expertise in order to launch a brand new app for this title next month.