O'Brien warns bondholders over delays in INM refinancing

LONDON - Denis O'Brien, Independent News & Media's second-largest shareholder, has warned the group's chances of refinancing a €200m bond are potentially less than 50-50.

IN&M: shareholder Denis O'Brien issues warning to bondholders over refinancing
IN&M: shareholder Denis O'Brien issues warning to bondholders over refinancing

Earlier this month, Independent News & Media negotiated a six-week "financial standstill" with its banks and bondholders, and secured €15m (£13.25m) of fresh capital as it looks to refinance its €200m (£178m) bond. The financial standstill runs from 18 May to 26 June.

However, O'Brien today (29 May) told reporters at an event in Dublin: "We could lose the support of the eight banks because of the delaying tactics of the bondholders. If they think Denis O'Brien is going to write a cheque to the bond holders, then they are smoking dope."

Speculation has persisted in recent months that INM may be forced to sell the UK-based Independent titles. However, O'Brien said he wanted to see them survive, once they made a profit.

"I would love to see the (London) Independent newspapers survive. They have a great heritage and fantastic journalists, but they have never made a profit," he said.

O'Brien added: "I don't believe in having media outlets just for the benefit of journalists and great writers. It has to be profitable for shareholders.

In April, INM said pre-tax profit at Independent News & Media's UK operations slumped by nearly 99% year on year in 2008 to just €200,000, following a drop in circulation and ad revenue.

INM's UK division, where Simon Kelner is managing director and editor-in-chief, posted revenue of €215m, a shortfall of €53.1m against the prior year.

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