INM secure deal with lenders, reports revenues of €539.7m for 2012
Published 26/04/2013 | 07:30
Independent News & Media has secured a deal with its lenders reducing its core debt level to €118m.
The company also announced 2012 results with revenues of €539.7m for the year on operating profits of €59.7m.
INM, which owns the Irish Independent and a number of other publications, said the debt deal will put the group on a secure footing on completion of all stages.
“This announcement is a very positive development for the company and is a pragmatic and constructive outcome for all stakeholders,” said chief executive Vincent Crowley.
"Assuming all stages of the restructuring are implemented in full, it put the group on a secure financial footing, with a sustainable debt level and an ability to implement a restructuring of the business."
A key part of the restructuring is the recent sale of the company's South African business for €167m.
It will also include a €40m capital raising by existing shareholders as well as the banks writing off some of the debt - following the rights issue, INM's syndicate of eight banks would likely to hold a stake somewhere "in the teens" Mr Crowley said.
The restructuring brings core debt levels at the company from over €420m to €118m, plus a further €8m in other facilities and credit lines, and extend it out to 2018.
The company, in which billionaire businessman Denis O'Brien is a 29.9pc shareholder, said it will also have to achieve annualised savings of about €26m on an annualised basis - although some of this cost-saving has been already achieved.
Mr Crowley said, however, that the restructuring will include a further head count reduction of of 10pc spread across all operations in Ireland on a voluntary basis.
It will also reduce INM's obligations in relation to its pension scheme deficit.
Mr Crowley recognised the tough economic environment facing the industry as a whole but he said it was encouraging that circulation was holding up well.
''Forecasting in these tough and challenging conditions is very difficult and visibility remains short. To date in 2013, we have seen total revenues down 10.4pc on the prior year. However, cost reduction initiatives implemented to date and planned, are targeted to assist in mitigating much of this revenue shortfall,'' he said.
However, he also added that digital revenues showed significant growth year-on-year of 16.9pc.
This includes Independent.ie and more than 15 brands/titles.
Shares in INM rose by 7.4pc in early trade to 38c.
INM's main banks include Allied Irish Banks and Bank of Ireland as well as a number of international institutions.
Davy Stockbrokers described the restructuring deal as "complicated" and added that if it is successfully completed it will put the company on a "much firmer footing."