INM shares fall on speculation of debt for equity swap

SHARES in Independent News & Media (INM) fell by nearly 15%, yesterday, on the back of further speculation that the group’s management is close to offering investors a stake of more than 40% in the group.

The deal is connected to the delayed repayment of a €200 million bond.

INM’s share price closed at 26c in Dublin, down by 14.52% – or 4c – on Friday’s close.

A media report over the weekend suggested that a debt-for-equity swap deal – as has been mooted, in the past, as a possible solution to the €200m bond refinancing issue – is being negotiatedbetween the INM board and its bondholders and that the investors could end up with as much as a 46% stake in the business.

The same report maintained that a deal could be signed between INM and its investors by the end of this week.

Such speculation,according to some industry sources, isn’t too far from reality.

However, a spokesperson for INM declined to comment, yesterday, beyond saying that “discussions towards a consensual conclusion are ongoing”.

Businessman Denis O’Brien – INM’s second largest individual shareholder – last week expressed his hope that a deal could be done, but also repeated his belief that the INM management lacked the ability to successfully reach a conclusion on the bond.

The latest deadline for a restructuring deadline arrives on Friday. A further, fourth, deadline extension will be needed in any event – if not to agree an overall deal, then to consummate one that may already have been arrived at.

Mr O’Brien is a vocal opponent to the INM board’s planned sale of its outdoor media company in South Africa (INM Outdoor) – which needs shareholder approval before going ahead – and its stated intention of retaining its two loss-making London newspaper titles – the Independent and Independent on Sunday.

He has also called for an extraordinary general meeting to vote on a number of his own resolutions, including the blocking of INM directors allotting and issuing shares.