SIR ANTHONY O’Reilly’s Independent News Media (INM) is mulling the possibility of asset disposals after concluding that it is unlikely to execute a sale of its stake in Sydney-based APN News Media in advance of a deadline to refinance or repay a €200 million bond in May.
Shares in INM fell to 18.2 cents last night from 35 cents the previous Friday, leading to speculation that the company will update the market early next week on the APN process.
The update is also likely to deal with the company’s trading position and its options for refinancing or paying back the bond that falls due in May.
At last night’s closing price, INM had a market capitalisation of €159.46 million. On the same day last year, its market capitalisation was €1.78 billion and €2.27 billion two years ago. This means that Sir Anthony, who holds some 29 per cent of the INM, and his rival Denis O’Brien, who holds more than 25 per cent, are nursing huge losses on their holdings in the company.
In Ireland, INM owns the Irish Independent, the Sunday Independent, the Sunday World and numerous regional newspapers.
It has interests in South Africa, India and Indonesia. Its British interests include the loss-making Independent titles, which have been the subject of speculation in recent times that they might be sold to Russian billionaire Alexander Lebedev, who has bought the London Evening Standard.
The company initiated a review of its control over 39.1 per cent of APN News Media last October, stating that the development followed “a number of expressions of interest” in the stake.
New Zealand business paper the Independent Financial Review this week quoted APN spokesman Luis Garcia as saying that the unsolicited bids were still active but that he “wouldn’t imagine there would be any movement until the end of the month at the earliest”.
INM, which said in October that any sale of its APN shares would reduce the net debt on its books to less than €600 million from €1.4 billion, is now examining alternatives to a sale of its APN interests. While one option is to issue a new bond, the weakness in the company’s share price and debt markets generally is such that it would have to pay a hefty coupon to raise the money.
An alternative is to sell some of its other interests. This is now believed to be under active consideration. While it is certain that the value of any sale of the London Independent titles would be compromised by their trading losses, it may be that INM attempts to sell a number of small assets.
