INM raises €29.3m in share placement
INDEPENDENT News & Media raised €29.3m yesterday by placing 50.5m new shares at a price of 58 cent each.
The publisher will use around €29m of the money to pay off the bulk of a €36m loan which formed part of the group's restructuring plan late last year. The loan had an interest rate of 25pc a year and the company said there would be savings of around €7m a year as a result of the repayment.
The company said the significant saving in interest repayments meant the transaction would be immediately earnings-enhancing and eliminate a future significant dilution for existing shareholders.
"Proceeds will be applied towards further debt reduction and, in particular, to pay down an expensive component of INM's existing capital structure," said INM chief executive Gavin O'Reilly. "The placing reduces INM's net debt, improves our capital structure, lowers debt-servicing costs and is immediately earnings-accretive for all shareholders."
The publishing group is committed to repaying debts to create value for shareholders, Mr O'Reilly added. INM cut its recourse net debt to €543m at the end of June and said there would be a further significant reduction by the end of this year. It also sold its remaining 5.7pc stake in Indian publisher Jagran Prakashan for €32.6m in the second half of the year.
The new shares will represent about 9.1pc of the company's shares and are being placed at a price slightly below yesterday's close of just above 60 cent.
INM is particularly pleased with the support shown by new institutional investors in this placing, which broadens the group's shareholder base and underscores its institutional appeal, Mr O'Reilly added.