INDEPENDENT NEWS & Media (INM) has sold off a third of its investment in Indian publisher Jagran Prakashan (JPL), raising some €22 million for use as a “cashflow tool” to pay down debt and enhance its liquidity.
The manoeuvre comes as INM and its bondholders examine new proposals from its banks to surmount the impasse created by its failure to repay an overdue €200 million bond. The negotiation is said to be “tense”.
Sources with direct knowledge of INM’s business interpreted the reduction of its JPL stake to 13.5 per cent from 20.8 per cent as a sign of weakness as the firm seeks a formula acceptable to key investor Denis O’Brien and its bondholders and lenders.
“INM is very pleased with its remaining exposure to the fast-growing Indian newspaper market and looks forward to continuing to work with JPL and the Gupta family in successfully expanding its business interests across India.”
INM’s banks include AIB, Bank of Ireland, Barclays, BNP Paribas, KBC Bank Ireland, Lloyds TSB and Ulster Bank, as well as ANZEF and ANZ Bank (Europe), whose commitments were previously held by Australia and New Zealand Banking Group. Their new terms follow a number of failed efforts to break the logjam.
INM’s recent proposal, which involved a discounted €60 million rights issue, was resisted by Mr O’Brien, its second-largest investor behind Sir Anthony O’Reilly. However, certain talks participants believe Mr O’Brien is trying to overplay his hand. “In this deal the banks are the kingmakers. I think Mr O’Brien has forgotten that,” one source said.
In addition to the overdue bond, INM has €590 million in bank debt due later this year and next and another €591 million due in three years.
