Media

INM agrees debt restructuring deal as losses mount

Media group agrees debt plan with banks as pre-tax losses for 2012 jump to €254.9 million

INM chief executive Vincent Crowley said the deal would allow the group to reposition itself for the structural challenges that all media companies are facing
INM chief executive Vincent Crowley said the deal would allow the group to reposition itself for the structural challenges that all media companies are facing
Fri Apr 26 2013 - 08:54

Independent News and Media has agreed the terms of a debt restructuring deal with its lenders which is designed to reduce the company's core debt to €118 million.

At the same time, the media group announced a pre-tax loss of €254.9 million for last year compared to €63.6 million for 2011 on the back of falling ad revenues.

Under the debt plan, the company has until the end of the year to follow up the €167 million sale of its South African business with a restructuring of its pension scheme, which had a deficit of €162 million at the end of 2012.

INM will also attempt to raise an additional €40 million in new equity as part of the agreement.

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Chief executive Vincent Crowley said its syndicate of eight banks would likely be left with a stake "somewhere in the teens" following the rights issue.

They would take control of 70 per cent of the company if the capital raising or pension restructuring are not agreed.

“This deal really gets us to an endgame where we’ve a core debt that’s very manageable and have the funding in place to reposition the group for the structural challenges that all media companies are facing,” Mr Crowley said.

“The revenue environment is tough, we’ve forecast for it to remain tough and this banking deal is predicated on a prudent set of assumptions. They’re realistic and take account of the economy we face in this country which doesn’t show any signs of a pick up.”

The group was forced to strike a similar deal in 2009 when it handed a near 50 per cent stake to its former bondholders, sold its flagship UK newspaper The Independent and some of its other overseas interests to help secure its future.

INM, in which businessman Denis O’Brien holds a 29.9 per cent stake, also reported that its operating profit fell 21 per cent to €59.7 million last year and that revenues for the first four months of 2013 were down 10 per cent.

The 5.7 per cent dip in advertising revenue seen in 2012 has more than doubled so far this year although it has been largely mitigated by cost cuts and Mr Crowley said another 10 per cent of staff would be laid off in the coming months.