INM hits back at O’Brien
Independent News & Media has turned down Denis O’Brien’s call for shareholders to vote on the closure of its UK Independent newspapers.
O’Brien requested an EGM, which would debate the removal and replacement of senior INM executives as well as the future of The Independent and The Independent on Sunday.
The company’s rebel shareholder also demanded a vote on whether INM should sell its lucrative South African advertising firm INM Outdoor.
INM has only given in to one of O’Brien’s demands, which involves looking to remove INM’s chairman Dr Brian Hillery and appointing a new senior independent director in place of Baroness Margaret Jay.
The group’s statement follows O’Brien’s push for a last minute change to INM’s rescue plan, which could see him investing £90 million of his own cash into the company to persuade shareholders to side with his proposals.
If INM’s current restructuring plans go ahead, the board will issue bondholders with equity in the company as part-payment for their debts, which would reduce O’Brien’s (and the largest shareholder Anthony O’Reilly’s) stake.
Under O’Brien’s proposals, bondholders would receive some cash immediately and swap the remainder of their loans for equity in the company, which would mean there would be no need for a subsequent heavily discounted rights issue.
O’Brien has also made it clear that he believes the company should keep INM Outdoor and instead focus on getting rid of struggling operations such as the loss-making Independent titles.
On Monday, he said: “There is no point is us as company subsidising a newspaper that really nobody wants to read”, and claims the newspapers will be closed by Christmas.
INM’s banks – Allied Irish Bank, Bank of Ireland, Barclays, BNP Paribas, KBC Bank Ireland, Lloyds TSB and Ulster Bank – are thought to be considering O’Brien’s proposals.
In the latest ABC release, The Independent‘s circulation was down by a hefty 18.3% year on year, leaving it with a total below 188,000 copies.
The Independent on Sunday also suffered a substantial year on year loss of 18.3% but managed to increase its circulation by 0.3% over the period to nearly 161,000 copies.