Owner of Independent on course for deal with lenders

Independent News & Media, the owner of The Independent, has reached an agreement in principle with its lenders, paving the way for a restructuring of the media group and a substantial reduction in its debts.

INM said yesterday that a proposal to exchange some of its debt for equity, allied to plans to further reduce borrowings through a rights issue and asset disposals, had been accepted by a working committee of bondholders who speak for 39 per cent of the bonds.

The agreement must now be agreed by 75 per cent of bondholders, but INM's chief executive, Gavin O'Reilly, said: "We now expect that all parties will move towards implementation of the restructuring without delay, including procuring necessary consents and approvals."

Under the agreement, INM's bondholders would swap €123m (£112m) worth of their bonds for a 47 per cent stake in the company. Existing shareholders would then be offered the chance to participate in a rights issue to raise €94m, retaining a 52 per cent interest assuming they take up their rights.

An asset disposal programme set to raise €150m is continuing, with the sale of INM Outdoor, one of the media group's South African businesses, due to be approved at an extraordinary general meeting later this year. In all, the company envisages reducing its total debt by some €350m.

Mr O'Reilly added: "INM's market-leading assets, restructured balance sheet and improved financial situation leave the company very well positioned to benefit from any cyclical economic recovery."

INM said it had rejected alternative restructuring proposals put to it by Denis O'Brien, who has a 26 per cent stake in the company. It said the board had considered the merits of the scheme and talked to other interested parties, including bondholders, before rejecting Mr O'Brien's proposals.