A consortium of eight banks, including State-owned AIB and Bank of Ireland, has agreed to write off almost €140m in debt owed by Independent News and Media.

The move is part of a series of measures being implemented by INM which the company said will reduce its net debt burden from €424m to €118m.

INM is using the €167m proceeds from the sale of its South African business to pay off some of the loans.

It will also raise €40m in new equity by issuing shares in a rights issue - where existing shareholders are offered the chance to buy more stock in proportion to their stakes in the company.

"If the rights issue is completed its lenders will write off €138m of its debt in return for equity representing €10m or 11% of INM's equity value at the time of issue", commented Goodbody Research analyst Gavin Kellher.

The media group also announced financial results for last year, which show a pre-tax loss of €254.9m compared to €63.6m for 2011.

INM said its net exceptional charges after tax came to €273.7m due to impairment charges at its Australian and island of Ireland operations and costs relating to over 200 redundancies in 2012.

Revenue for the year at the group fell by 3.3% to €539.7m as the weak consumer confidence in both Ireland and South Africa continue to negatively impact on its top line performance.

INM said that its advertising revenue last year fell by 5.7%.

Operating profits for last year - before exceptionals - fell by €15.8m to €59.7m. But it said that when its debt restructuring is completed, it will have the flexibility to reposition itself for opportunities in the digital arena and deliver further significant cost reductions.

''Forecasting in these tough and challenging conditions is very difficult and visibility remains short. To date in 2013, we have seen total revenues down 10.4% on the prior year. However, cost reduction initiatives implemented to date and planned, are targeted to assist in mitigating much of this revenue shortfall,'' commented the company's group chief executive Vincent Crowley.

He said the company will be looking for 100 job cuts as part of its restructuring, and that all structures - including the merger of the Irish Independent and Sunday Independent newsrooms - are being looked at.

Independent News and Media said that revenue at its island of Ireland division fell by 2.3% to €354.9m while operating profits, before exceptionals, fell by over 16% to €38.2m. It said its Irish titles, which include the Irish Independent, the Sunday World and the Belfast Telegraph, saw a 11% reduction in publishing advertising revenue.

Revenues at its South African operations fell by 5% to €184.8m while operating profit dropped over 28% to €27m due to tough trading conditions and the impact of labour unrest during the year.

The company said its directors do not propose recommending a final dividend for 2012.