Fees of €3.6m incurred in renegotiation of borrowings

INDEPENDENT NEWS Media paid €3.6 million in fees and charges to renegotiate its borrowings with lenders in the first half of this year.

This comprised €2.4 million in professional fees for advice received by the group in its negotiations with the banks, and adviser costs incurred by the lenders.

It also paid €1.2 million in fees to the group’s banks as part of the renegotiation of its financing arrangements in March.

INM’s net debt stood at €423.3 million at the end of June. Its bank facilities amount to €441.8 million; these mature in May 2014.

To avoid a possible breach of its loan covenants INM has rescheduled a €21 million repayment that was due in June 2013 to September of that year.

The company said it has also begun talks with its banks about its “future refinancing requirements” and said the lenders continue to be “supportive” and described the discussions as “constructive”.

One potential solution to its debt difficulties is the sale of its South African business, which is under strategic review.

Chief executive Vincent Crowley said a third bidder has now emerged for the business and indicated that its sale could have the effect of halving its debt.

Mr Crowley said the decision by the board on Monday to appoint Leslie Buckley as chairman was “reflective of the challenges the company is facing in deleveraging and sorting out the cost base.

“He has very significant experience in these areas. That was the backdrop.”

Mr Buckley was one of four new non-executive directors elected to the board of INM at a meeting of shareholders on Monday.

He had been voted off the board by shareholders in June 2011. Mr Buckley is a close business associate of Denis O’Brien, INM’s largest shareholder. Mr O’Brien has three representatives on the 10-person board – Mr Buckley, Paul Connolly and Lucy Gaffney.

When asked if he considered Mr O’Brien to have control over INM’s affairs, Mr Crowley said: “Not that I’m aware of. He has the influence commensurate with a 29.9 per cent shareholding – no more, no less.”

When asked how possible curbs on media ownership here might impact on Mr O’Brien’s substantial holding in INM, given that he also owns a number of Irish commercial radio stations, Mr Crowley said: “I don’t know. It depends what these regulations are. It seems to have gone quiet at the moment.”