Independent owner strikes dramatic restructuring deal

LONDON - Independent News & Media has struck a major financial restructuring deal with bondholders that would cut debt by €350m but slash Sir Anthony O'Reilly and Denis O'Brien's holdings in the company.

IN&M: restructuring deal to save future of company
IN&M: restructuring deal to save future of company

Under the proposed deal, IN&M's net debt would be cut by €350m through a debt-for-equity swap, a rights issue and disposals. As at 30 June, the company's debt totalled €1.3bn.

The key features of the restructuring are that €123m of its outstanding bonds will be exchanged for shares representing 46% of the company. It will result in Anthony O'Reilly's 28% stake in INM and O'Brien's 26% holding almost halved. Existing shareholders will also be offered an opportunity to participate in the rights issue, otherwise known as a share sale, aimed at raising €94m.

The third part of the restructuring is that IN&M's bondholders have consented to the disposal of certain businesses - such as its African outdoor arm INM Outdoor - for €150m.

IN&M said that in making its decision to proceed with the restructuring it has considered other proposals, including one from O'Brien. His proposal would have led to O'Brien buying a further 26% of the company for €100m

However, the company said its plan would deliver "a superior outcome with materially less execution risk compared to any other proposal received".

The deal is still subject to shareholder, bondholder and bank approval.

In a statement, Gavin O'Reilly, IN&M chief executive, said: "This restructuring will provide the INM Group with a €350m reduction in net debt in 2009  and a stabilised financial position.

"We now expect that all parties will move towards implementation of the restructuring without delay, including procuring necessary consents and approvals."

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