Lebedev may have to pay £20m for Independent titles

Russian oligarch Alexander Lebedev may have to pay up to £20 million to acquire the Independent and Independent on Sunday newspapers.

According to a report published today by Citigroup, the titles, which lost £13 million last year, could be worth as much as £20m.

It said that while the papers are arguably “core” to the INM brand, they are “certainly not core to profitability”.

“While the sale of the Independent titles would remove losses, it would do little to improve the group’s leverage,” it added.

Even if the Independent titles were sold for £20 million, the report said, INM would still have an earnings-to-debt ratio of 5.5 times.

“Whether or not this deal goes ahead, the bigger concern for INM at the moment is whether or not it can reach an agreement with its lenders and bondholders over the refinancing of its missed May 2008 bond,” the report said.

The latest ABC figures, for May 2009, show that the Independent‘s circulation was down 15% year on year, while the Independent on Sunday suffered a fall of almost 17% year on year (see ABC National Newspaper Round-Up: May 2009).