THE board of Independent News & Media (INM) has announced hat it has reached an initial agreement with its lenders regarding the overdue refinancing of its €200 million bond.
The deal will see around €123m of the bond exchanged for an equity stake for the bondholders, of 46.3% in INM – broadly in line with what was speculated upon last week.
A rights issue will also be held, aimed at raising €94m to pay off the remainder of the bond debt. The agreement needs a 75% acceptance rate from the relevant bondholders, but INM said in a statement last night that its banks have indicated that they are supportive of this restructuring plan.
INM also said that it had considered all other proposals including that of Denis O’Brien – INM’s second-largest shareholder with a near 26% stake. Mr O’Brien’s proposals included doing away with the rights issue by injecting €100m into INM and refinancing the rest of the bond debt and interest due through a mix of equity and cash and ultimately leaving him with a controlling stake in the group.
Commenting on last night’s outline agreement, INM chief executive, Gavin O’Reilly said: “This restructuring will provide the INM with a €350m reduction in net debt in 2009 and a stabilised financial position. We now expect that all parties will move towards implementation of the restructuring without delay, including procuring necessary consents and approvals.”
INM said that it felt that this plan “delivers a superior outcome, specifically for existing shareholders and bondholders, with materially less execution risk compared to any other proposal received”.
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