Independent News & Media agrees a 332m debt reduction rescue strategy
INDEPENDENT News & Media, the highly-indebted media group, yesterday announced that it had agreed with its bond-holders and banks a restructuring plan that will reduce its debts by £332m.
The plan, which still faces several hurdles before it can be implemented, involves the stakes held by Sir Anthony O’Reilly and rival Denis O’Brien being almost halved.
One source close to the situation said he expected O’Brien, who last week proposed a £90m equity injection, to come back with a rival offer on terms that would be more attractive for the bond-holders and shareholders. O’Brien’s current proposal was roundly rejected by the media group’s board.
“Denis will formulate a strategy and may come back with a revised proposal,” the source said.
Sources close to the Independent camp said that the group’s proposal was considerably better for bond-holders and shareholders than the O’Brien alternative. “He will have to come back with something special,” one source said.
Under the Independent board’s plan the group intends to exchange the £100m plus of outstanding bonds for new shares representing 46 per cent of the issued share capital. There will also be a rights issue to raise not in excess of £86m.
North Sea Partners and Davy stockbrokers are advising on the deal.