BONDHOLDERS IN Independent News & Media (IN&M) are negotiating with the company on the resolution of an overdue €200 million note on the basis that key investor Denis O’Brien will not sign up to current proposals.

Sources close to the bondholder group said they had formed the view, in light of public statements made by Mr O’Brien, that there was little prospect of securing his agreement.

INM last month secured a second extension to a “standstill” pact in relation to the overdue bond until August 27th.

With a €50 million bank debt due in September, the expiry of the current standstill is seen as the effective deadline for a deal as the company’s position would weaken further if bank debt went overdue on top of an overdue bond.

The bondholder sources believe it will be possible to secure a deal with IN&M and that such a deal could bypass Mr O’Brien.

His three associates on the company’s board could not block a package acceptable to other stakeholders in IN&M, the sources said.

“It doesn’t need his approval . . . There’s no definite deal but we’re making progress.”

Sources close to Mr O’Brien, who has said examinership is an option for INM, insisted he was not seeking to stymie a deal. They said it was always his view that “radical surgery” was required in the company.

“His position on this hasn’t changed. Tough decisions need to be taken now for the long-term future,” they said. “This is the only way to save the company.”

The sources close to Mr O’Brien added that he was not advancing proposals that would suit or benefit only him. “What he is proposing is in the interests of all the stakeholders.”

IN&M declined to comment. The firm has been selling assets to raise funds but Mr O’Brien recently declared that he opposed the sale of South African advertising company IN&M Outdoor, a unit long mooted for disposal.