Independent News and Media has proposed a restructuring of its balance sheet through a capital reduction as well as the cancellation of authorised deferred shares.

In a statement today, INM said that the proposals are subject to the passing of two special resolutions by shareholders. To this end, the company will hold an EGM in Dublin on December 5.

If the resolutions are approved, the company will then apply to the High Court for permission to restructure.

The move is the final phase of INM's recapitalisation and financial restructuring, a process that first began in 2013.

In a note, Davy said that if the proposals are approved the company's balance sheet will be strengthened. This in turn will open up the possibility of dividend payments on future profits. 

Due to impairments on its international assets, Independent News & Media had accumulated a deficit on its profit and loss account of about €1.1 billion up to the end of June of this year. 

"The board is now seeking to eliminate the legacy deficit to provide it with a further strengthened balance sheet and a solid financial foundation for the future," the stockbrokers said. 

The deferred shares were created in 2009 and 2013 as part of two share capital reorganisations, which reduced the nominal value of the ordinary shares.

Davy noted that there will  be no change in the number of ordinary shares in issue after the capital reduction, while the capital reduction itself will not involve any distribution or repayment of capital.