Independent in talks on Chorus sale

Independent News & Media has discussed the sale of its interest in debt-laden cable firm, Chorus, with a number of parties, at least two of which have progressed to performing due diligence.

Independent chief financial officer, Mr Donal Buggy, said yesterday that the group's 50 per cent holding in Chorus, which last year gave rise to an €82.5 million impairment charge, would be sold only if a suitable bid was received.

"We haven't received a bid of value," added Independent deputy chairman, Mr Liam Healy.

Analysts, many of whom believe Chorus has been on the market for up to two years, have suggested that the company would attract bids of less than €100 million in the depressed cable market that prevails.

Mr Buggy said Independent had "no specific timeframe" for the sale.

The directors were speaking after an extraordinary general meeting at which shareholders in Independent gave their approval for a rights issue that will raise €103 million and allow the group to reduce its high debt levels.

The discounted rights issue, which is underwritten by Davy Stockbrokers, offers shareholders four new shares priced at 70 cents for each 15 they already hold. Shareholders have until May 15th to take up their allocation.

Independent closed two cents higher at €1.32 last night.

The group also plans to raise €88 million through the sale of British regional newspaper interests and at least €59 million from the divestment of "non-core assets" and/or the refinancing of existing financial instruments.

Mr Buggy declined to name the non-core assets likely to be sold but said the company was "making progress" on the matter.

Another of Independent's brokers, Goodbody, has indicated that the group's stakes in Portuguese newspaper publisher, Lusomundo, and mobile data firm, iTouch, are among the assets targeted for disposal.

Mr Buggy said Independent would be "significantly stronger" after the overhaul of its balance sheet was completed.

When all debt-reduction measures are taken together, the group's net debt will fall from €1.2 billion to less than €1 billion.

Mr Healy also confirmed yesterday that the Independent board has not yet met the Irish Association of Investment Managers (IAIM) to discuss the group's corporate governance.

The meeting, which has been requested by the IAIM, would take place before Independent's annual general meeting in early June, he said.

Mr Healy said the Independent board had "strong views" on the issue, noting that the executive chairman role, currently held by Sir Anthony O'Reilly, had "worked very well for a lot of companies".

He acknowledged, however, that if rules requiring the separation of the chairman and chief executive roles came to apply in the UK, Independent would have no choice but to comply.