Media group says debt sharing would be sensitive to lenders
Independent News & Media said yesterday that any “burden sharing”with its lenders would be based on normal commercial considerations by both sides.
The media group issued a statement that responded to an article in The Irish Times yesterday stating that senior Government figures are apprehensive about INM having some of its debts written off by State-supported banks.
State-owned AIB and Bank of Ireland, in which the Government has a 15 per cent share, are among a consortium of eight lenders engaged with INM over its €400 million-plus loans. INM is seeking to restructure these debts to a more manageable level.
INM’s biggest shareholder is billionaire businessman Denis O’Brien. Other major investors include wealthy financier Dermot Desmond and Sir Anthony O’Reilly, whose family controlled the business from the 1970s until last year.
INM chairman Leslie Buckley claimed yesterday that the article was “sorely lacking in context”. He said INM was “operationally strong” but “threatened” by “excessive” borrowings and “poor decisions” by previous management.
“In my view, if debt sustainability is a valid objective for the State, for households and for bailed-out banks, it is also a legitimate aspiration for a corporate entity that employs over 1,100 staff on this island,” he added.
Any decision on debt relief would be based on “pragmatic and operational grounds as to do otherwise would be inimical to the commercial interests of lenders”, he said.
“INM is currently in constructive and ongoing discussions with its banks and we are committed to securing a consensual solution on this basis.”
Separately, it emerged yesterday that staff at Independent Newspapers are seeking an urgent meeting with management over proposals to implement swingeing cuts to pensions at the media group’s Irish business.
A proposal seen by The Irish Times says staff face a cut of up to 50 per cent in their pension benefits in an effort to repair a €155 million shortfall in the defined-benefits schemes.
That would infer that scheme’s net liabilities have jumped by a quarter from the figure reported for 2011.
In its proposals, the company commits to continuing to pay €10.5 million into the scheme annually for the next 11 years, even though no future service will be provided for in the defined-benefit or final salary scheme. The company also expects to provide an “inducement” of €20 million to ease the transition of workers to a defined-contribution scheme.
However, it says it is not clear where the heavily indebted company will find this money or when.