The regional newspaper publisher has made good headway under chief executive Ashley Highfield in reducing its borrowings, which have fallen from £357m at the time of his appointment.

However, this has come at the cost of investment in the business, as most of the cash the company generates is used to service its debt; in return for its last refinancing package in April 2012, the group had to commit to repaying at least £70m a year until September 2015.

Of greater concern is the upcoming tightening of two of the group's financial covenants - consolidated EBITDA to consolidated net borrowing costs and consolidated net borrowings to consolidated EBITDA - from December 2013 through to the end of the facility in September 2015.

Taken with the buy-out of the former News International (now News UK) print contract, which helped to pay down debt but led Johnston Press to operate "closer to its financial covenants than was originally intended by both the group and its lenders", this led the group and its auditors Deloitte to flag up "a material uncertainty" that could give rise to "significant doubt over the Group’s ability to continue as a going concern" in its interim results.

This is thought to have precipitated the current negotiations with creditors, which include Barclays and Royal Bank of Scotland, with Johnston Press under pressure to negotiate a new deal by the middle of next year according to a report in The Sunday Times.

According to the newspaper, the two banks could take "warrants" in the company that would give them the right to buy shares in it at a reduced price, in return for reducing its debt burden.