KyivPost

Mohammad Zahoor buys Kyiv Post for an estimated $1.1 million

Print version
July 30, 2009, 8:42 p.m. | Ukraine — by Brian Bonner

Brian Bonner

Brian Bonner has served as the chief editor of the Kyiv Post since 2008. He also held the job in 1999, three years after first arriving in Ukraine to teach journalism. Bonner is a veteran American journalist who spent most of his professional life with the St. Paul Pioneer Press in Minnesota, where he covered international, national and local news during a nearly 24-year career in which he was a staff writer and an assigning editor. Bonner left the St. Paul newspaper in 2007 to become the associate director of international communications at the Campaign For Tobacco-Free Kids in Washington, D.C. He also served as a political analyst with the Organization for Security and Cooperation in Europe during six election observation missions in Ukraine, Belarus, Turkmenistan and Kazakhstan. To contact: email bribonner@gmail.com, Facebook at www.facebook.com/brianbonner, Twitter @BSBonner and Skype at brian.bonner1959.

American founder sold paper into ‘good hands’ while new owner says 'best years’ are still ahead.

Mohammad Zahoor, a United Kingdom citizen who owns the ISTIL Group, has purchased the Kyiv Post in a deal valued by Dragon Capital investment bank at roughly $1.1 million.

Zahoor bought the newspaper, Ukraine’s top English-language news publication since 1995, from its founder and only owner, American Jed Sunden. Sunden announced the sale at a noon meeting on July 29to Kyiv Post staff members. Zahoor was not present.

However, in announcing the acquisition, Zahoor pledged to continue and strengthen Kyiv Post traditions of independent and investigative journalism.

“We believe that the best years of the Kyiv Post lie ahead, and we have great plans for the brand’s development, in print, on the Internet and with other media as well,” Zahoor said. “We are committed to upholding the Kyiv Post’s high standards of independent journalism, and will continue to allow the editors the freedom that they previously enjoyed. We recognize that the Kyiv Post was one of the few truly independent voices in Ukrainian media since its inception, which is why it enjoys almost unparalleled trust among its readership.”

While neither sided disclosed the purchase price, Dragon Capital estimated the deal at $1.1 million, “based on our 2009 financial projections for KP Media and current multiples at which publishing companies are traded,” according to its July 30 investment report.

Dragon Capital helped Sunden’s KP Media, the Kyiv Post’s former owner, sell 20 percent of the company’s shares in 2006, raising $11 million.

ISTIL Group is active in real estate, media, telecommunications, film production and television production, among other businesses in Ukraine and elsewhere. ISTIL stands for International Steel & Tube Industries, Ltd. The company has offices in Kyiv and was founded by Zahoor in 1991.

A native of Pakistan, Zahoor is a multi-millionaire who earned his fortune in steel production and trading in Donetsk.He sold the steel business more than a year ago – at the peak of the market, analysts say -- and has been investing into other areas, building up an impressive and diversified portfolio of assets.

Representatives of Zahoor and Sunden had been negotiating the sale intensively for the last two months and Sunden said he entertained other bids.

The sale includes both the newspaper and the Kyiv Postwebsite, whose audience has been growing dramatically since a mid-September upgrade. The newspaper currently employs 22 people in news, advertising, marketing, distribution and accounting. But Zahoor expressed interest in hiring additional staff members to expand and improve the newspaper.

While the print version of the newspaper is published every Friday, the website is now continuously updated with staff reports andstories from Reuters, Associated Press, Interfax and other news services.

The deal brings to an end a 14-year era of Kyiv Post ownership by Sunden. The newspaper started with humble origins only four years into Ukraine’s independence, with $8,000 and six employees. But its reputation as a beacon of independent journalism and its financial success grew quickly.

In announcing the sale, Sunden said that money wasn’t the only factor in selling to ISTIL Group. Sunden said that he believes that the Kyiv Post will be “in good hands” under Zahoor’s ownership.

The Kyiv Post was the first publication in Sunden’s KP Media company, which has grown to includenumerous other publications and websites. Other KP Media properties include the Russian-language Korrespondent magazine (launched in 2002) and website, BigMir (launced in 2000), Afisha andKyiv Business Directory.

But, as Dragon Capital noted in its July 30 report, the last year has been difficult for KP Media.

“The economic decline, accompanied by a sharp contraction of the domestic advertising market, forced KP Media to close all new publications it had launched after its 2006 private placement, including the metro daily 15 Minutes, Ukrainian-language women’s magazines Pani and Vona and weekly news magazine Novynar.”

Dragon Capital expects that “KP Media will likely use the sale proceeds to replenish its working capital and reduce debt burden. Given the difficult situation on the market and in the company, we do not rule out KP Media will be forced to divest its other print media, such as entertainment weekly Afisha and some joint print projects. We expect that after KP Media cleans up its print media portfolio, the only exception being its very successful Korrespondent weekly magazine, it will continue to develop its Internet business.”

Zahoor said he has “the highest respect for the people at KP Media, and wish them the best of success in the future.”

The Kyiv Post is hosting comments to foster lively debate. Criticism is fine, but stick to the issues. Comments that include profanity or personal attacks will be removed from the site. If you think that a posted comment violates these standards, please flag it and alert us. We will take steps to block violators.
Simon - ISTILshareholder Steinle Aug. 11, 2009, 11:05 p.m.    

Oh, someone has edited (deleted) the comments.

Is this the influence of the new owner?

Independent journalism?

{# <-- parent id goes here
Simon - ISTILshareholder Steinle Aug. 11, 2009, 11:16 p.m.    

No. I am wrong. Everything is still there. Maybe a temporary problem on my side.

The editor is free to delete all my comments which belong to this article.

{# <-- parent id goes here
Simon - ISTILshareholder Steinle Aug. 11, 2009, 11:10 p.m.    

Interesting article.

But I miss some points:

- arms dealing ("Reventox")

- Mont Blanc Trading Ltd.

- disputes with Sohail Masood

- delisting of the company and attitude against minority shareholders of ISTIL

{# <-- parent id goes here
Simon - ISTILshareholder Steinle Aug. 11, 2009, 11:12 p.m.    

My comments belong to this article: http://www.kyivpost.com/nation/46583

{# <-- parent id goes here
Simon - ISTILshareholder Steinle Aug. 11, 2009, 11:12 p.m.    

Zahoor: Robust Media Vital

{# <-- parent id goes here

KyivPost

© 1995–2014 Public Media

Web links to Kyiv Post material are allowed provided that they contain a URL hyperlink to the www.kyivpost.com material and a maximum 500-character extract of the story. Otherwise, all materials contained on this site are protected by copyright law and may not be reproduced without the prior written permission of Public Media at news@kyivpost.com
All information of the Interfax-Ukraine news agency placed on this web site is designed for internal use only. Its reproduction or distribution in any form is prohibited without a written permission of Interfax-Ukraine.