INDEPENDENT NEWS &Media (INM) has cashed in more shares in Indian publisher Jagran Prakashan Ltd as it continues to reduce its bank debt.
The Irish media company yesterday announced that it had sold 23.5 million ordinary shares in Jagran, netting almost €42 million in the process.
The proceeds will be used to pay down its bank debt. According to analysts, INM’s debt, excluding its APN associate in Australia, will be between €500 and €550 million after this transaction. INM’s debt position will become clear when it publishes its full-year 2009 financial results later this month.
This latest share sales has reduced INM’s stake in Jagran to 5.7 per cent from 13.5 per cent previously.
Jagran is quoted on the Bombay and National Stock Exchanges in India.
INM originally invested €28.5 million in Jagran in 2005 when it held a stake of 26 per cent. This was subsequently diluted to 20.8 per cent following the Indian company’s stock market flotation.
Dublin-based INM has pocketed about €64 million from a combination of this latest disposal and a sale of Jagran shares in July 2009.
INM’s remaining holding in Jagran is worth about €33 million at current market prices.
INM said it “continues” to hold its remaining stake in the Indian media company. But it is not clear if the Irish group will be a long-term holder of this stake or if it will seek to offload its remaining shares in the near future.
Gavin O’Reilly, INM’s chief executive, will remain on the board of Jagran.
Jagran is a leading player in the Indian newspaper market. It publishes Dainik Jagran, a Hindi-language newspaper and the country’s biggest daily with a total readership of 54.58 million.
Jagran’s gross assets at March 31st were 9.16 billion Indian rupees and it reported profit before tax of R1.35 billion in the year ended March 31st 2009.
INM acquired a stake in Jagran in 2005 buying the shares from the founding Gupta family. The move was financed from Independent’s cash balances at the time and took place at a time when Jagran was a privately-held company.
Commenting on the deal at the time, Sir Anthony O’Reilly said: “We are investing in the world’s biggest democracy. We see this as a real opportunity to grow. We are investing in an economy that is growing at 8 per cent per year and which has a stock exchange that is on fire.”
