SHARES in Independent News & Media (INM) jumped as much as 35pc yesterday after the publisher said it would raise €40m by selling fresh shares before Christmas to new and existing investors.
The shares rose 3.2 cent to 13.2 cent in heavy trading on the Dublin stock exchange, helping to cement the publisher's position as the best-performing shares on the stock exchange this year.
The confirmation of a capital raising is the final piece in a complex jigsaw puzzle to restructure INM's balance sheet.
The capital raise, which must still be approved by shareholders at a specially convened meeting, is necessary before chief executive Vincent Crowley can slash the publisher's debt to around €118m.
It follows deals with the publisher's main lenders to write down debt, a reduction in future pension payments to employees and the sale of the South African business, all in conjunction with additional cost-cutting measures.
Two of the publisher's biggest shareholders have indicated their intention to participate in the capital raise, INM said.
Businessman Denis O'Brien will maintain his stake at 29.9pc when the placement is finalised, while financier Dermot Desmond said he would increase his stake to 15pc from 6.4pc.
The proposed capital raise will allow the "attraction of a level of new investment into the company as it seeks to re-build the business following a long period of addressing significant challenges", INM said in a statement.
The capital will be raised in a firm placing and an open offer that will make the new shares available to new and existing shareholders.
The firm placing is expected to represent about 70pc of the capital raise and the open offer will account for the remaining 30pc.
Lenders will own around 11pc of the company following the capital raise while the employee benefit trust will own a further 5pc.
Davy Stockbrokers will act for INM in respect to the capital raise.