Banks write off €138m of INM debt

Independent News & Media has reached a debt-for-equity agreement with its lenders, which will slash its debt by nearly €140 million.

The group has drawn up a complex restructuring plan which will see its core debt burden reduce from over €420m to a more sustainable €118m, while it is also in advanced discussions with trustees to reduce its €162m pension scheme deficit. The main element of the plan — speculated upon for a number of weeks but only formally announced yesterday — will see the consortium of eight banks (including Bank of Ireland, AIB, Barclays, Lloyds, ANZ and RBS) write off €138m of outstanding debt, in return for a combined equity stake of between 11% and 16%.

INM will also use the €167m or so it gets from the sale of its South African operations to drive debt down further and plans to raise extra capital via a rights issue, to enable €40m to be paid off the debt by the end of this year.