Sale of INM South African assets approved

Shareholders have unanimously approved Independent News & Media’s plans to sell its South African operations and to restructure its debt levels.

At back-to-back EGMs in Dublin yesterday, a total of 334.9m votes were cast on each resolution — with 333.8m approvals registered on both counts.

The news was strong enough to give INM a near 23% boost in trading yesterday afternoon.

While INM issued a tough set of full-year data for 2012 in April, showing a significant widening of pre-tax losses and a fall in group revenue, that month was arguably more notable for the groundwork, cemented at yesterday’s meetings, that management undertook to solidify the group’s future by initially agreeing a €164m sale of its South African print assets and entering into a debt-for-equity deal with its main lenders, aimed at significantly lowering its net debt burden.

The latter deal had already been heralded as a “very positive development” by the group’s chief executive, Vincent Crowley, and one which puts the group “on a secure financial footing” with a sustainable debt level.

INM’s debt restructuring will see its eight lending banks take an approximate combined 11% equity stake in the group in return for a sizeable portion of outstanding debt.

Shareholders also overwhelmingly approved the selling of new shares in a rights issue as part of the share capital reorganisation resolution.

This is aimed at raising extra capital to allow for €40m to be paid off INM’s debt this year.

The proceeds from the South African asset sale will also go directly to debt reduction — INM’s total debt will drop from €422m to €118m.

Most of yesterday’s resolutions targeted changes to INM’s capital structure in order to facilitate a number of actions included in April’s lenders agreement.

The restructuring will include some cost-saving measures, including previously announced redundancies and a cut in payments from its pension scheme.

In a separate announcement, INM yesterday said non-executive director Jerome Kennedy acquired 100,000 INM shares.