Independent News & Media has announced plans to buy back up to £75 million (€107 million) in bonds next month as it looks to cut the cost of its debt, writes Dominic Coyle.
The group is offering a premium of 2.35 per cent over the face value of the bonds which mature in June next year, plus any interest that has built up.
A spokesman for the company said Independent was replacing the bond debt with lower cost bank debt. The bank was paying 9.25 per cent on the bonds, which were issued in 1995.
The company reckons that by redeeming the bonds six months ahead of schedule, it will achieve net savings on interest payments of €2 million.
People looking to take up the offer will have to tender their bonds up to December 1st.
In addition to the early redemption programme, the group's subsidiary Independent Newspaper Finance will hold a meeting of bondholders on December 10th to change the terms in relation to any remaining bonds.
It proposes to allow Independent buy back any remaining bonds at a time of its choosing, up to the maturity date without paying a premium.
The meeting will require the attendance of people holding or controlling two-thirds of the bonds.
Bonds tendered by investors for early payment will be used by the company to vote for the proposal in an exercise designed to mop up outstanding debt under the bond.
The proposal will require the approval of 75 per cent of the bonds voted at the meeting.
"This exercise removes the refinancing risk as the company replaces the bonds on which it would have to pay out £75 million next year with bank debt carrying a lower interest burden and repayable in five years," said a spokesman. "It just clears the decks a little bit."
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