Independent News & Media (INM), the Irish publisher and the holding company of Business Report, planned to ask its lenders to write off up to e100 million (R1.1 billion) of debt as part of a wider overhaul, Britain’s Sunday Times reported.
The company said on Friday it would need urgent and substantial restructuring in response to high levels of debt.
A spokesman yesterday declined to comment on the report that the firm was seeking to write off debt. The publisher hopes to secure agreement on the debt write-off with a consortium of eight banks by early next year, the newspaper reported without citing sources.
The restructuring would also include a rights issue, a radical cost-cutting programme and the sale of the company’s South African unit.
The company warned in August that its operating profit would fall sharply this year as advertising revenue shrank, following a difficult first half in which senior executives were pushed out by a change in ownership.
The company said group revenue fell 3 percent year on year in the 45 weeks to November 9 in constant currency terms, while advertising revenues dropped 5.4 percent. Total costs in the period fell by 0.7 percent year on year but further cost reductions will be necessary.
“Notwithstanding recent momentum, a significant and permanent realignment of INM’s cost base is now critical to INM’s future success,” the publishing group said.
Telecoms billionaire Denis O’Brien tightened his grip on INM earlier this year by increasing his stake to 29.9 percent, putting pressure on Gavin O’Reilly to resign as chief executive and leading a shareholder revolt that also ousted INM’s chairman and finance chief.
O’Reilly’s departure ended his family’s 30-year control of Ireland’s largest media company. – Reuters