INDEPENDENT NEWS and Media (INM) is considering raising €60 million from shareholders as part of a deal to settle a €200 million debt.
The Dublin- and London-listed newspaper and advertising group has been in talks with banks to which it owes €200 million plus interest on foot of bonds that were originally due for repayment last month.
The company issued a statement yesterday saying that it has put a comprehensive refinancing proposal to the banks and bondholders.
“One element of this proposal involves IN&M seeking to raise some capital, subject to shareholder approval, by way of a deeply-discounted rights offering in order to partly repay the bonds,” the group said.
It is understood that the company hopes to raise €60 million from the rights issue – an issue of shares to existing equity holders – should it go ahead.
This would involve the principal shareholders, businessman Denis O’Brien and Sir Anthony O’Reilly and his family, putting up a total of about €30 million between them.
It has already been flagged that the company’s main shareholders could contribute up to €30 million as part of a solution.
The other elements of the proposed deal would involve giving the bondholders 10 per cent of the proceeds of a sale of some of its businesses, valued at a total of €150 million, and extending the repayment date for the balance of its debt by three years.
An extension would involve increasing the interest payable on the bonds, which stands at 5.75 per cent.
The businesses that IN&M is considering selling are its South African advertising operation, IN&M Outdoor, price comparison firm Verivox, and its 20 per cent stake in gaming software developer, Cashcade.
The bonds were originally due to be repaid on May 18th. INM, whose titles include the Irish Independent, London Independentand a 50 per cent stake in the Irish Daily Star, announced on that date that it was entering talks with its bankers under a "standstill" agreement. The standstill period is due to end on Friday.
The company said yesterday that the outcome of the talks remained uncertain, but added that there was a “willingness on the part of the stakeholders to reach a consensual solution”.
If a deal is agreed by Friday, it will effectively mean that the standstill period will be extended to allow the agreement to take effect.
INM’s share price closed 21 per cent down at 26 cent yesterday, from an opening show of 33 cent.
The company’s shares have lost about 85 per cent of their value in the last year.
Earlier this month, Mr O’Brien’s associates, Lesley Buckley, Lucy Gaffney and Paul Connolly were elected to the group’s board. Sir Anthony’s son, Gavin O’Reilly, has taken over as chief executive.
