INDEPENDENT NEWS & Media (IN&M) was poised last night to receive a second extension to a standstill pact with its bondholders and banks after weeks of talks failed to resolve a deadlock over its failure in May to repay a €200 million note.
Talks yesterday centred on the possibility of an extension until the end of August as company chief Gavin O’Reilly tries to reconcile the competing interests of key investor Denis O’Brien and bondholders over the company’s dilemma. Last month Mr O’Brien publicly rejected IN&M’s proposals to break the impasse.
IN&M and its bondholders were said to have been very far apart until the bondholders apparently softened their stance late last month.
However, the failure to meet today’s deadline for the expiry of the second standstill period indicates that a formula to satisfy all sides remains elusive.
Shares in IN&M, down almost 85 per cent in 12 months, dropped one cent yesterday to 23 cent after it sold its 18.07 per cent stake in bingo software developer, Cashcade, for €15.3 million to online gambling firm Partygaming.
The transaction comes less than a month after IN&M sold off a third of its investment in Indian publisher Jagran Prakashan (JPL), raising some €22 million for use as a “cashflow tool” to pay down debt and enhance its liquidity.
The Cashcade stake and the JPL shares rank among a number of assets that INM has put up for sale. The other assets on the market are South African advertising business INM Outdoor and INM’s interests in price comparison firm Verivox.
Partygaming is one of the biggest operators in the internet gaming business. The deal is worth €15.3 million net of costs to the media group, but it said yesterday that subject to the business meeting certain targets, it could receive further payments next year and in 2011.
Cashcade’s brands include Foxy Bingo, Think Bingo and the free website, Cheeky Bingo. Its gross assets stood at £21.7 million (€25.2 million) at the end of 2008. It made profits of £7.5 million last year.
