SHARES in Independent News & Media (INM) jumped by more than 11% in early trading yesterday, after the group announced it had raised €52 million from its rights issue, helping to reduce overall debt levels by around €350m.
The rights issue — along with the sale of certain non-core assets and a debt-for-equity deal — marked one of the pivotal points of INM’s debt reduction programme and the repayment of its €200m bond, which was originally due for payment last May and which has been uppermost on the group’s agenda ever since.
Commenting on INM’s position following the closure of the rights issue, group chief executive Gavin O’Reilly said: “We are very pleased with the significant take-up of the rights issue and the significant support it has received from shareholders. This, combined with the completion of the asset disposal programme, means that net debt has been reduced by approximately €350m in 2009.
“With this new capital structure, the company looks forward to focusing solely on its operational performance and driving operating profit growth as economic conditions recover.”
A total of 97.2% of the new shares were taken up, while the remaining 2.8% have been placed on the open market.
The conclusion of the rights issue gives the combined bondholders a 48% equity stake in INM and dilutes the stakes of the group’s main two individual investors — Tony O’Reilly and Denis O’Brien — to just over 14.5% and just over 13.5%, respectively.
INM recently sold its online gaming subsidiary, Cashcade, for €15.3m and gained shareholder approval for the €98m sale of its INM Outdoor advertising business in South Africa.
Although not fully signed off on, last week also saw the virtual conclusion of the sale of INM’s 49% stake in the German online price comparison website, Verivox to VVX Investments for €18.3m.
INM’s share price finished yesterday at 10.8 cents, up 10%.
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