City AM is at the edge of bankruptcy , after its attempts to find a buyer following the pandemic were unsuccessful.
The London Freesheet, which is reeling from repeated locking downs and the legacy of home-working, will be calling in administrators at BDO in order to start an insolvency procedure.
The bosses are hoping to get a prepackage agreement that would allow them to sell all or part of the company immediately after it enters administration.
Editor said in an email sent to staff that administration was always a possibility. He added that the paper is still “in advanced negotiations” with a potential buyer.
He wrote: “I know this is unsettling but I want to let you know that we are doing ‘business as normal’ and working day and night to ensure a future for City AM.”
Earlier this week, the company announced that it had hired FRP Advisory in order to explore a possible sale.
Readers, including Conservative MP Tracey Crouch who called the newspaper’s struggles “scandalous”, responded with passion.
She continued: “City AM by far is the best freesheet.” I hope that a buyer is found soon so that the excellent coverage and insights can continue many years into the future.
City AM suffered a great deal from the pandemic, as many financial professionals stopped travelling to the Square Mile. In March 2020, it switched to a digital-only model and was out of print for an 18 month period.
Since then, the business-oriented paper has struggled to gain its former audience due to a shift towards home working. The paper reaches approximately 68,000 readers a day, a drop of more than 10,000 compared to pre-pandemic levels.
In January, the title stopped printing on Fridays as was adapted to new working. The paper coined “TWATs”, an acronym for employees who work only on Tuesdays, Thursdays and Wednesdays in October 2021.
City AM’s focus has shifted to digital content, and its website attracts between 1.8m-2m unique visitors each month.
It is now struggling to pay off debts totalling PS1.6m by 2021, and has no funds for investment.
City AM was also hit by the recent Tube and train strike wave, and rising newsprint and distribution cost.
City AM is owned 50pc by a Dutch investor consortium, with the remaining 25pc held by Lawson Muncaster, managing director of City AM and Jens Thorpe as chief executive.
City AM and BDO refused to comment.