Independent sells Portuguese newspaper holding for €24m

Independent News & Media has raised €24 million through the sale of its 19 per cent holding in Portuguese newspaper group Lusomundo.

The stake has been purchased by Cofina, Portugal's second-largest newspaper group after Lusomundo. Cofina is reported to be interested in a merger between the two companies.

Independent said the sale marked a further step in its €315 recapitalisation programme, which was introduced earlier this year to drive down the company's debt levels.

Independent has long viewed Lusomundo as an investment or "non-core" asset and the deal with Cofina comes as little surprise. The sale is understood to have generated a slight profit for the company.

"In a competitive and consolidating market, we achieved a very good price for this non-core asset," said Independent chief financial officer, Mr Donal Buggy. He said Cofina had approached Independent with "a most attractive offer".

The market reacted positively to the Lusomundo announcement yesterday, with Independent's shares closing five cents higher at €1.80 last night.

Independent first became involved with the Portuguese group in 1994, when it paid £5.9 million (€8.4 million) for a 6.6 per cent stake.

The holding grew progressively over the next few years before settling at 19.1 per cent in 1997.

When the deal closes over coming days, Independent will have raised a total of €234 million in its recapitalisation programme, with a further €85 million due from the sale of the group's 23 UK regional media assets to US media group, Gannett.

The completion of this sale, which is the subject of a study by the British Competition Authority, would bring the total proceeds of the recapitalisation to €319 million.

It is thought likely that the original €315 million target will be further exceeded over coming months through the sale of more assets, including Independent's editorial headquarter building in Dublin's Middle Abbey Street.

Analysts believe the property could change hands for some €20 million.

Independent has already generated €103 million though a rights issue, €20 million though the sale of treasury stock and €65 million from the sale of convertible bonds in its APN subsidiary. The company has also realised a €22 million surplus from an APN share transaction in New Zealand.