The big unknown in the three-step debt restructuring unveiled by Independent News & Media is the cost of taking a chainsaw to its pension scheme, or to be more precise, the plan to: “reduce their deficit and provide greater certainty on future pension-related funding”. What is certain is that it will cost money.

Documents leaked earlier this year sketched out proposals that would see the pension deficit cut in half - from €155 million at that stage to €76.3 million - through a combination of deep cuts in members’ accrued benefits and closure of the four constituent schemes. Included in the proposal was the injection of €20 million, to “smooth” employee transfers to the new defined contribution scheme.

If the initial feedback to the proposal is any guide then €20 million is not going to be enough, given that members were looking at 50 per cent cuts in their pensions. The expectation is that INM will have to stump up a bit more and hope that extra cash combined with the banks’ threat to pull the plug on the whole restructuring if a pension deal is not done will force employees and accept the deal.

Given the negotiations that lie ahead it is not surprising that INM did not put a figure on the costs of the pension deal, but the debt numbers published yesterday would seem to give some indication of the scope available.

After the first stage of the restructuring is complete INM will have banking facilities of €324 million but appear to only have debts of €290 million after the €148 million net proceeds of the sale of its South African business are applied to pay down its €438 million debt pile.However, the writedowns associated with the third leg of the restructuring - after the pension issue is resolved - seem to assume that the full €324 million is reduced to €118 million through combination of fresh equity and debt writedown. This in turn implies that debt will rise by some €34 million during the second stage, when the pension deficit is restructured. Given that €20 million is already on the table, it looks like the company has given itself quite a bit of wriggle room to get the deal over the line. But even so, INM’s pensions scheme members are still going to feel the same level of pain as the banks but without the consolation of a minimum 10 per cent stake in the company.