INDEPENDENT NEWS & Media’s bondholders yesterday approved the first element of a restructuring deal that will see them own 43.6 per cent of the company.
As a result, Sir Anthony O’Reilly and rebel shareholder Denis O’Brien, INM’s two biggest shareholders, will have their holdings significantly diluted.
Mr O’Reilly will own 15 per cent post-restructuring with Mr O’Brien holding about 14 per cent.
Mr O’Brien opposed the terms of the restructuring and was unsuccessful in several attempts to have alternative proposals approved by the bondholders. The bondholder group met in London yesterday and approved the “extraordinary resolution” that relates to INM’s inability earlier this year to redeem €200 million worth of bonds.
In a statement issued yesterday, INM said 99.72 per cent of the bonds that were voted were placed in favour of the resolution.
The Irish media company added: “INM welcomes this essential endorsement of the restructuring and anticipates that the restructuring will now be completed on schedule and prior to the year end, thereby affording the company a secure and stable foundation, with a significantly reduced debt profile, from which to leverage INM businesses and key strengths across its global portfolio of assets.”
The complex restructuring of INM will result in the company reducing its debt pile by €350 million and selling its South African advertising subsidiary, INM Outdoor.
INM said it will now proceed with issuing 723.7 million new ordinary shares to the bondholders “as consideration for outstanding principal and accrued but unpaid interest on the bonds equal to €122.9 million”.
INM must still negotiate three extraordinary general meetings this month before the restructuring programme is complete.
On Friday, shareholders will consider a resolution placed by Mr O’Brien to revoke the board’s authority to issue new shares. This is expected to be defeated.
Mr O’Brien failed last week with two resolutions aimed at changing the composition of INM’s board.
Two other egms will be held on November 26th. One will seek support for a rights issue aimed at raising €92.2 million in gross proceeds. On the same day, INM will also seek approval for the €98 million disposal of INM Outdoor.
All of the egms are being held in the Green Isle Hotel in southwest Dublin.
While the bondholders will collectively own 43.6 per cent of INM, a spokesman for the company said no one member of the group would hold more than 4.7 per cent of the media company’s shares.
The largest bondholder within the group was owed €20 million. This is thought to be UK-based investment company Henderson New Star.
News of the bondholder agreement failed to support INM’s share price in Dublin yesterday. The stock closed down 2.9 per cent at 16.5 cent. Its market value is €138.5 million.
