INM considers sale of APN stake to reduce debt

Independent News & Media is considering a sale of its stake in APN News & Media Ltd to cut its debt by about €800 million…

Independent News & Media is considering a sale of its stake in APN News & Media Ltd to cut its debt by about €800 million ($1 billion).

The news sent Independent News shares 28 per cent higher in Dublin at €0.64 by 2.50pm.

The publisher of the Irish Independentand Sunday Independentsaid it had received a number of unsolicited expressions of interest for its 39.1 per cent stake in the Australasian radio and newspaper group, adding that it intended to sell.

"The INM Board believes that the significant proceeds receivable from monetising its shareholding in APN would substantially enhance INM's balance sheet and would be earnings neutral for 2009," it said in a statement.

To cut costs, INM also said its British Independentand Sunday Independentnewspapers would start sharing some services with other UK publishers, with possible job cuts kept under review.

INM said the cooperation with other publishers would make editorial workflows more efficient, without damaging the editorial ethos of the Independent.

INM previously made several attempts to increase its stake in APN, including a failed A$3 billion ($2 billion) bid together with private equity firms last year.

"(APN's) strategic value has not been fairly reflected in INM's share price, due primarily to the fact that INM doesn't fully control APN's cash flows," it said.

The APN sale would cut INM's net debt to under €600 million from about €1.4 billion, it added.

In an accompanying trading statement, INM said it expected revenue in 2009 to be marginally lower than in 2008 on a constant currency basis, though it said the global financial turmoil made forecasting difficult.

INM targets a 2009 operating profit performance broadly in line with 2008 on a like-for-like, constant currency basis, it said.

"We believe that the recent easing of interest rates across our markets, with the increased probability of further rate reductions, will assist in halting the current economic weakness and may lead to some growth towards the second half of 2009," it said.

INM, which also publishes the Irish Independent and titles in South Africa and India, said it expected 2008 group revenue to drop by 2 percent on a constant currency basis, or 11 per cent in euro terms.

Reuters