INM’s plan to restructure its defined benefit scheme has been well-flagged, but has been awaiting regulatory approval, before implementation.
The group’s management has already stated its intention to pump €5.6m into the restructured scheme, per annum, over the coming decade. However, staff are set to see a 39% cut to their pension entitlements, while an employee benefit trust will take a 5% stake in the company.
The formal establishment of that trust was approved by shareholders at INM’s agm last Friday.
The reduction in benefits have become effective as of this week and the approval of the overall plan will see INM’s pension deficit shrink drastically, from nearly €200m to a more manageable €80m.
“The approval by the Irish Pensions Board of the Pension Restructuring satisfies one of the key conditions outstanding in respect of the Final Stage Restructuring agreed with the company’s lenders and to be implemented by 31 Dec 2013.
“In particular it clears the way for the preferred option for the company, a capital raise of a net €40m to enable a further material debt reduction,” INM said in a short statement yesterday.
The capital raise will mark the final phase of INM’s ongoing financial restructuring programme, following the earlier debt restructuring deal with eight of its lenders and the sale of its South African print assets. In total, the programme will cut INM’s debt burden from over €420m to around €118m.
Speaking at last week’s agm, group chief executive, Vincent Crowley said the restructuring would present management with flexibility to invest in the business and rebuild shareholder value, present a more comfortable balance sheet and removing pressure from lenders.