Former Conservative party chair Nadhim Zahawi is working with the Barclay family on their attempts to regain control of the Telegraph newspaper, which was placed into receivership by its lender Lloyds in June.
The Barclay family has been in talks with Lloyds about taking the newspaper group back and have also been trying to line up funding from Middle Eastern backers as a means of boosting their financial firepower.
The family’s multiple offers being discussed for the newspaper are still about half of the debt owed by the newspaper group to Lloyds, which totals more than £1bn, according to a person close to the situation.
Executives at Lloyds have not accepted the offers, according to two people familiar with the matter, with the bank committed to an auction for the sale of the business this autumn. Goldman Sachs has been appointed to oversee the sale.
Zahawi, who was sacked as the Tory chair at the start of the year after failing to disclose that HMRC was investigating his tax affairs, has emerged as a middle man between the family and the Middle Eastern funds. One person close to the process said that the money was likely to come from Abu Dhabi.
The Stratford-on-Avon MP, who co-founded polling group YouGov, was sacked after the prime minister’s ethics adviser found that he had committed a “serious breach” of the ministerial code. He did not respond to a request for comment.
One person familiar with the family’s thinking said that they hoped their offers — which started the same week as the newspaper was put into receivership in June — were a more straightforward way for the bank to resolve the situation without the cost and complications of a formal sale.
Many of the potential bidders, such as Daily Mail owner DMGT and Rupert Murdoch’s News UK, would face competition issues, while politicians are already warning that they will take a close look at the next owner of an important newspaper for the Conservative party. Boris Johnson was a columnist for the newspaper while serving as prime minister.
One person close to the situation said that some bidders were already sounding out potential supporters in the Conservative party to help smooth the process.
Another person close to the process said that Zahawi was seeking a fee as part of arranging financing from a wealthy Middle Eastern family. Zahawi was not available for comment. Lloyds and the Barclay family declined to comment
Zahawi could also be made chair of the newspaper group if their attempts proved successful, according to the Times newspaper, which first reported his role.
Am I reading this right. The Barclay family sent the paper into bankruptcy, and now want to take back control by wiping out the £1b in debt for half the price?