IN&M board warns O'Brien over his 'unilateral actions'

LONDON - Independent News & Media has struck back at dissident shareholder Denis O'Brien, warning that his "unilateral actions" could damage its attempts to secure a financial restructuring.

IN&M: board hits back at shareholder Denis O'Brien
IN&M: board hits back at shareholder Denis O'Brien

O'Brien wants a second extraordinary general meeting, which would give voters a say on the company's restructuring with its lending banks and bondholders. Earlier this week, it emerged that Independent News & Media is close to a settlement with its bondholders and banks, whereby former chief executive Tony O'Reilly will dilute his controlling stake in the group to extend loan repayment terms.

O'Brien is also against a recent company move that gives the company's directors the power to issue new shares without shareholder approval.

This follows a separate request earlier this month by O'Brien, for an extraordinary general meeting to vote on the future of its UK-based Independent newspapers. His intervention ended a six-month truce with IN&M that followed O'Reilly's retirement as chief executive earlier this year.

But in a strongly-worded statement last night (15 September), the company said that revoking the ability of company directors to issue new shares without shareholder approval, "during this difficult and rapidly developing period as the company pursues its restructuring discussions", would undermine the board's efforts to find the optimal solution for the company and would consequently risk damaging all such interests.

It went on to claim that, despite requests, O'Brien had failed to put forward financial restructuring plans on his own, adding, "this is despite the fact that his representatives have been closely involved in the restructuring discussions from the outset".

The statement urged O'Brien to put forward a restructuring proposal, but warned: "His apparent personal antagonism towards the board and management and his very public campaign in that regard, only serves to damage the trading prospects, staff morale and reputation of IN&M, and ultimately destroys value in the group and hinders a consensual refinancing solution, outside a court administered process, being achieved."

 

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