O’Brien will not use his own fortune to end INM impasse

THE owners of the Irish Independent have only a 50-50 chance of agreeing refinancing of up to €200 million in loan bonds, as the company continues its brinkmanship with its debtors.

Independent News & Media, with debts of €1.4 billion, agreed a “standstill” agreement with its debtors earlier this month as it works on plans to sell off €150 million in assets with a view to resolving its crucial bond issue by June 26.

INM’s second largest shareholder, Denis O’Brien said there’s a “less than 50-50 chance” that an Independent bond will be refinanced.

The company has secured an additional €15m working capital facility from its banks to cover it up to June 26. This has been secured on agreed assets and repayments from specified asset disposals.

“We could lose the support of the eight banks because of the delaying tactics of the bond holders,” Mr O’Brien told reporters in Dublin.

And billionaire O’Brien, who owns 26% of INM, ruled out using his personal fortune to resolve the impasse.

He said: “If they think Denis O’Brien is going to write a cheque to the bond holders, then they are smoking dope.”

He declined to say what the consequences of failing to agree with the bondholders might be.

“Let people work it all out,” O’Brien said. “They’re stringing us out. This is not complicated.”

The company expects to raise between €100m and €150m from the sale of its price comparison website Verivox, gaming software firm Cashcade and its South African outdoor advertising business by the end of the third quarter.

In March INM said Mr O’Brien and the company’s largest shareholders, the O’Reilly family led by Anthony O’Reilly with 28.5%, ended a long running and bitter feud so they could work to a “common goal”.

Prior to this Mr O’Brien, who had been branded “a dissident” shareholder by the O’Reilly clan, had called for the closure of the loss making London-based Independent. However, Mr O’Brien has signalled a change in thinking.

“I would love to see the London Independent newspaper survive. I think it has a great heritage; it’s got fantastic journalists, but they have never made a profit,” he said.

Mr O’Brien said the collapse in advertising means that all its business units had to provide value for shareholders.

“I don’t believe in having media outlets just for the benefit of journalists and great writers,” he said.

Independent shares declined 3 cents, or 11%, to 25 cents in Dublin yesterday. The stock has declined 40% this year.