INM financial plan gets the green light despite staff protests on pension cuts
Shareholders at Independent News and Media (INM) have overwhelmingly approved a capital restructuring plan that could lead to the resumption of dividends for the first time since the onset of the financial crisis.
An extraordinary general meeting (EGM) convened to consider two motions enabling the plan was overshadowed yesterday, however, by a separate protest from current and former employees of the company.
This followed an announcment last month by INM - publishers of the Irish Independent, 'Sunday Independent' and Independent.ie - that the company would no longer contribute to its defined-benefit pension scheme, a move that will lead to the closure of the scheme which has a €23m deficit.
INM chairman Leslie Buckley, a long-time associate of businessman Denis O'Brien - INM's largest single shareholder with a 29.88pc stake - fielded a series of angry questions from several shareholders.
The board heard concerns from Giles Kerr, a shareholder and corporate governance consultant, who said he was "dismayed" to read media reports about a boardroom row over a proposal for INM to acquire national radio station Newstalk, owned by Mr O'Brien's Communicorp.
Mr Buckley, who said the two restructuring resolutions arose because INM had "greatly overvalued" assets in the past, declined to comment on the now highly public boardroom row between Mr Buckley and INM chief executive Robert Pitt row over the potential acquisition of Newstalk. He also said it was "totally inappropriate" to comment on the scheme as pension trustees were currently talking to the company.
Mr Buckley was pressed by National Union of Journalist Irish secretary Seamus Dooley, who said he failed to see how questions around the defined benefit pension scheme were not relevant to the resolutions. "I believe that it is possible to restructure the company and it is possible to pay dividends without ensuring that people are put in pension poverty." said Mr Dooley.
Mr Buckley said both he and the board understood the concerns of the pension trustees. "Unfortunately, it is not appropriate for me to comment because there are ongoing discussions taking place between your pension trustees and the company," he said.
When asked what implications the pension closure would have on INM's balance sheet, the firm's chief financial officer Ryan Preston said he couldn't comment as the company hadn't reached an agreement with the trustees.
"There is no cash gain for the company, so we are not benefiting in a cash way," said Mr Preston.
Shareholders were asked to back two resolutions aimed at cleaning up the media group's balance sheet.
The resolutions were defeated by a show of hands in the meeting, but carried overwhelmingly by investors including Mr O'Brien and businessman Dermot Desmond, who holds a 15pc stake in INM via his IIU Nominees vehicle. Both resolutions passed with 99.88pc of the votes.
In Dublin, INM shares closed up 1.72pc at 11.8c each.
The resolutions related to the write-off of €1.1bn worth of historic losses that the current board "inherited".
"In the period from 1988 to 2008, the company expanded overseas and acquired international media assets in a diverse range of countries such as Australia, India, New Zealand, South Africa and the UK," said Mr Buckley.
Protesters outside the meeting said they felt "betrayed" and "fearful" following the pension scheme announcement.
Former 'Sunday Independent' deputy business editor Martin Fitzpatrick described the pensions move as "a despicable first". A former trustee of the scheme, he said the move should be stopped.