LOSS-MAKING regional newspaper publisher River Media is trying to raise €10 million through the sale of a 20 per cent stake in the business.
The Letterkenny-based company, which controls a stable of 13 newspapers, says it does not require the new investment to remain viable. Established in 2005 by businessmen Padraig O'Dwyer, Tim Collins and the Irish News, River's titles include the Letterkenny Post, the Sligo Post, the Derry News, the Kildare Post, the Meath Post and the Wicklow News.
The firm targets readers in the 20-50 age bracket whom it says are not served by traditional regional papers.
Mr Collins is a former Government adviser, barrister and public affairs consultant. Mr O'Dwyer was a founder of Highland Radio in Donegal and Radio Kerry and was a founder of Northern Media Group, which operates six radio stations in the North.
A confidential circular for potential investors - seen by The Irish Times - indicates that River incurred an after-tax loss of €5.87 million last year on revenues of €8.86 million after introducing a number of new titles.
Mr Collins said he expects the company to break even early next year. The circular indicates that the €10 million being sought includes €4.7 million for the paydown of bank debt, €3.3 million for payment of a printing liability and shareholder loans and €2 million for working capital.
Mr Collins said 2007 was a year in which the company made a particularly heavy investment in its business and had significant borrowing as a result of that.
"We believe the time is right and [that] it is prudent to seek to reduce debt and improve the level of cash on our balance sheet. However, the company does not require this new investment in order to remain viable. Indeed, we are trading well and we are on target to break even in early 2009." Business targets for the current year were set a number of months ago "and we are on target", Mr Collins said. "We have a very, very robust sales model and it is performing well."
While the company is seeking an equity partner to invest €10 million for a 20 per cent stake, the circular said "other investment options" may be considered.
"It is an ideal foothold for an Irish media player to increase their regional market presence or for a strategic financial partner to enter the Irish market.
"It's ongoing and we're talking with a number of parties," Mr Collins said. The circular forecasts sales of some €16.33 million this year and a loss before interest, tax, depreciation and amortisation of about €160,000.
