IRD gives up pursuing APN over masthead agreement

By Paul McBeth

Monday 23rd March 2009

The Inland Revenue Department has dropped its challenge to tax deductions claimed by APN News & Media over the sale and lease back of its mastheads.

The media outlet, part-owned by Tony O'Reilly's Independent News & Media, won't have to pay additional GST on the sale of its mastheads to JPMorgan in 2001 and subsequent lease back, after the government changed legislation in 2004 to prevent Fairfax Media from using a similar structure with its acquisitions of New Zealand's Independent Newspapers in 2003.

The owner of the New Zealand Herald sold its intangible assets to JPMorgan for $515 million, immediately acquiring the right to lease the APN mastheads back to the wider group for seven years at an annual payment of $94.5 million. The media company claims a tax deduction for the entire payment.

Shares of APN were unchanged at $1.20 and have slumped 61% this year.

Separately, the parent of APN said it appointed Rothschild and Davy Stockbrokers to talk with holders of its 200 million of euro bonds that mature in May. Independent News may seek to negotiate with bondholders after abandoning a plan to sell new debt to refinance the issue, citing adverse market conditions.

Comments from our readers

No comments yet