Media board confident of bond deal

THE board of Independent News & Media (INM) said yesterday that it is confident of reaching a satisfactory agreement from its ongoing negotiations with relevant stakeholders over the refinancing terms of its €200 million bond.

In its end of year statement, INM re-iterated that the faltering credit markets meant it was unable to raise the funds needed to pay off the bond and, just last week, Denis O’Brien – the group’s second largest shareholder – said there was only a 50-50 chance of a successful outcome from the refinancing talks.

While refusing to go into detail on either the refinancing issue or the much-speculated-upon disposal of assets, Donal Buggy – INM’s chief financial officer – said yesterday: “There will be a deal. Denis is not a director. The directors are confident that an agreement will be reached, which is acceptable to the group.”

Chief operating officer – and soon-to-be chief executive – Gavin O’Reilly added that Mr O’Brien and Tony O’Reilly were working together to bring about a satisfactory result for the group.

He rejected claims that last year’s public spat between the group’s chief shareholders had distracted management in its financial dealings, adding that the recent failure to sell its near 40% stake in Australian media group APN hindered chances of lowering the €1.4bn group debt and paying off the €200m bond.

On the issue of disposals – and specifically the possible fate of the group’s English newspapers, the Independent and Independent on Sunday – Mr O’Reilly told reporters that the only strategy on the table for the two London-based titles remained a reduction in their losses and that management “was working towards that”.

He added that an auction process was under way for the sale of INM’s holding in online assets Cashcade, Verivox and the INM Outdoor advertising asset in South Africa.

After two postponements, INM finally published its 2008 full-year results yesterday. As expected, what management called “exceptionally” challenging market conditions pulled all numbers down – revenue falling nearly 12% to €1.47 billion; operating profit down 17% to €290.3m; pre-tax profit down 26% at €211.7m and earnings per share of 14.6c turning into a loss per share of 19.9c.

On a geographical basis, South Africa was the only one of INM’s markets to show revenue growth last year, rising by 1.8%. Revenue in Ireland fell by 6%.