Financier Dermot Desmond will increase his holding in Independent News & Media (INM) from approximately 6.4 per cent to 15 per cent if the media group's proposed capital raising goes ahead as planned. It is expected that the capital raising will take place by year-end, pending an egm. A further announcement on the transaction however is likely in the coming week.

The capital raising, which is intended to raise €40 million net of expenses, represents the final stage of the restructuring agreed by INM with its lenders earlier this year. If it goes ahead, it will reduce the group’s core debt to €118 million plus other facilities and credit lines of approximately €10 million.

“The completion of this final stage will provide INM with financial stability and give it a firm platform to implement its business plan and strategic repositioning and will also significantly lower the group’s annual interest costs and extend INM’s debt maturity profile,” the group said in a statement.

It is understood that the capital raising will likely result in a dilution for shareholders of the order of between 40 and 70 per cent. If the capital raising was not to go ahead, the group’s banks would automatically get 70 per cent of the equity of the group, under the restructuring deal.

According to INM, its largest shareholder, Denis O’Brien, will participate in the offering and will maintain his shareholding in the group at approximately 29.9 per cent, thereby remaining below the 30 per cent level which would trigger a takeover bid.

Mr Desmond has also signalled his participation in the transaction, but will increase his shareholding, from approximately 6.4 per cent to 15 per cent.

It is not yet clear what other major shareholders, such as the O’Reilly family, which has a 13 per cent interest in the media group, will do.