Dermot Desmond’s shareholding in Independent News & Media is set to increase from its current level of around 6.4% to 15% following the group’s upcoming planned capital-raising effort.
The media giant is — as previously announced — looking to raise €40m as the last part of its financial restructuring effort, which should slash core group net debt to a manageable level of €118m and give the INM board some flexibility to invest in the business.
However, management said yesterday that — following consultation with existing and prospective investors — the capital raise will be by way of a share placing, via a combination of firm placement and open offer; rather than the previously preferred option of a rights issue.
A portion of the new ordinary shares will be placed with existing and new institutional shareholders, with the rest to be placed by existing shareholders under the open offer. The firm placing is expected to represent around 70% of the capital raising, with the open offer 30%.
In an update, INM’s management added that a number of the group’s key shareholders — whose combined stakes total 36.3% — have indicated their intention to participate in the firm placing and open offer. Main shareholder Denis O’Brien’s participation will result in maintaining, rather than increase, his 29.9% share.
Mr Desmond’s holding, however, will increase to 15% (from around 6.4%) of the enlarged issued share capital of the company in the aftermath of a successful outcome. It is not known what other high-profile shareholders — including the O’Reilly family, which still controls 13% of the group — will do.
News of the fundraising plan — which still requires shareholder approval — sent INM’s share price soaring by 33% yesterday to 13c.
“The completion of this final stage will provide INM with financial stability and give it a firm platform to implement its business plan and strategic repositioning and will also significantly lower the group’s annual interest costs and extend INM’s debt maturity profile,” management said yesterday.
INM added that it will make further announcements — regarding the issue price and the timetable for the implementation of the capital raise “in due course”.
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