INSURANCE GROUP FBD has taken a 3.3 per cent stake in Independent News Media (INM) as part of the debt for equity swap agreed in the restructuring of the media group’s borrowings.

The insurer, a bond investor in INM, took 51.4 million shares in the group through a transaction on November 11th after bondholders agreed the first element of the restructuring agreement.

FBD is among a number of investors, which includes Pioneer, Aviva and Invesco, in the €200 million INM bond that has been due for repayment since last May.

The insurer sat on the bondholders’ committee which had led the negotiations with INM on the restructuring of the group’s debt.

Bondholders are taking 43.6 per cent of the company’s shares in the first part of the agreement.

The bondholders will also receive the proceeds from a rights issue, which INM hopes will raise €92.2 million, and from the €98 million disposal of the media company’s South African advertising business, INM Outdoor. Both deals await shareholder approval.

The restructuring concerns €350 million of INM’s debts.

FBD listed €17.4 million worth of corporate bonds on its books in the group’s 2008 annual report.

Shares in FBD rose 3.6 per cent, or 23 cent, to €6.63 yesterday after the company said in a trading statement that its operating profit per share for 2009 would be ahead of expectations, barring any exceptional claims during the remainder of the year. Analysts had guided average operating earnings at 86 cent a share.

FBD said that it had maintained “a solid trading performance and delivered operating profits in the second half of 2009 to date”.

The insurer expects to deliver operating profits in its underwriting and non-underwriting businesses this year it said.

Loss ratios had improved, the company said, and the decline in premiums in the second half of the year had moderated compared with the first half of the year.

“Insurance risk across the Irish insurance industry continues to decline in line with the level of economic activity and consumer spending,” the firm said. “Market rate increases have continued in the second half of 2009 to date, compensating for some of the fall in market values and cover.”

A reduction in the number of road accidents and deaths had led to a lower number of motor injury claims and there was continued improvement in the underlying loss ratio, excluding exceptionally large or weather-related claims.

FBD’s property, hotel and leisure businesses in Ireland and Spain have delivered operating profits and cash flow in the second half of the year, the company said.

Oversupply in the hotel sector was a key challenge in Ireland and capacity needed to reduce to match falling customer demand.

NCB Stockbrokers raised its rating on FBD to “buy” from “hold”, citing the “solid” trading reported by the firm.

It increased its target for the 2009 operating earnings to about 98 cent a share.