Holders of bonds issued by Independent News & Media are reported to be planning to shortly appoint a financial adviser to help them negotiate the company's debts.

The Reuters news agency quoted sources close to the situation as saying that the lenders were considering whether to grant the company extra time to repay a €200m bond which matures on May 18.

The report said investment bank Houlihan Lokey was one of the favourites to claim the mandate.

The company's most immediate problem is the upcoming May 18 maturity, but Reuters quoted a source as saying that any refinancing deal would be likely to encompass all of INM's upcoming debt maturities. The company has a total of €590m of bank loans maturing by September 2010.

Last week, INM said it had failed to raise new debt to pay off the €200m bond due to mature later this month. It warned that if it did not get extra time to meet the bond repayment, there was a strong likelihood of a breach of its financial covenants in 2009.

The group has appointed Rothschild and Davy to advise it in relation to its refinancing requirements. INM also said it was in 'constructive discussions' with a committee of its bondholders, its banks and its two major shareholders - Tony O'Reilly and Denis O'Brien.