Independent News and Media has reached an outline agreement on its financial restructuring and has turned down an offer of a €100m investment from shareholder Denis O'Brien, which would have given him a two thirds stake in the company.
The refinancing deal, agreed last night, will give bondholders a 46% stake in the group, almost halving the holdings of existing shareholders.
It is proposed that the group will swap €123m of an overdue €200m bond for a 46% equity stake, which represents about 17 cent per share. Shareholders will also be offered a rights issue of up to €94m at a price of 0.5 cent per share.
The restructuring depends on the support of 75% of the bondholders. The group's banks support the plan.
As part of the deal, it has been agreed to dispose of certain businesses, as previously announced, for about €150m. One of these sales, INM Outdoor, will be voted on at a specially-convened EGM, which will be held shortly.
Denis O'Brien owns just over 26% of the group's shares and has three representatives at board level.
A statement from Independent News and Media said Mr O'Brien's offer valued INM shares at about 1.4 cent a share - a discount of about 95% to the closing price in Dublin on Monday. It also said it raised 'significant competition law and media plurality issues'.
The statement also said that it remains open to any party to put forward an alternative and viable proposal, which provides better economies for stakeholders.
'This restructuring will provide the INM Group with a €350m reduction in net debt in 2009, through the combination of the equitisation of the bonds, the rights issue and the group's previously announced disposal programme, and a stabilised financial position,' commented CEO Gavin O'Reilly.
'We now expect that all parties will move towards implementation of the restructuring without delay, including procuring necessary consents and approvals,' he added.
INM shares closed down 3.5 cent to 23.5 cent in Dublin this afternoon - a loss of almost 13%.
