INM confirms one-month extension to financial agreement
Independent News & Media has confirmed a one month extension to its financial standstill agreement to the City.
The deal, which was agreed with the media group’s banks and bondholders, will now run until the end of October to ensure “the continuation of ongoing and constructive discussions between all key stakeholders in relation to the group’s financial restructuring,” according to INM.
In addition, its banks and bondholders have agreed to the sale of the company’s South African ad business INM Outdoor, which is a key part of the leading shareholder Anthony O’Reilly’s strategy for reducing INM’s debts.
However, the lenders’ consent will come as a blow to INM’s rebel shareholder Denis O’Brien, who has been calling for the sale of the UK Independent titles rather than the sale of INM Outdoor.
O’Brien, who has been at constant loggerheads with O’Reilly and the board about the company’s restructuring plans, tried to push an alternative rescue plan last week.
He held last-minute talks with the group’s syndicate of eight major banks in an attempt to win support for his proposals, which involve him investing £90 million of his own cash into the ailing company so that bondholders receive some cash immediately and swap the remainder of their loans for equity in the company.
O’Brien also requested an EGM to debate the removal and replacement of senior INM executives as well as the future of The Independent and The Independent on Sunday.
O’Brien made it clear that he wants INM to keep INM Outdoor, saying the company should focus on getting rid of struggling operations such as the loss-making Independent titles instead.
A week ago, O’Brien said: “There is no point is us as company subsidising a newspaper that really nobody wants to read” and claimed the newspaper would be closed by Christmas.
However, INM has refused to comply with O’Brien’s demands, with the exception of looking at the removal of INM’s chairman Dr Brian Hillery and the appointment of a new senior independent director in place of Baroness Margaret Jay.
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 and O’Reilly’s stake in the company.