Independent News gains further extension on debt

Monday 29th June 2009

Independent News & Media, the UK owner of 32% of APN News & Media, gained a one-month extension on debt repayments, giving it more time to devise a repayment plan as part of a broader financial restructure.

The media company controlled by Irish businessman Tony O’Reilly last week said it was considering a “deeply discounted” rights issue to repay some of its 200 million euros of 5.75% bonds that were due in May.

Independent News said the financial standstill agreed with banks and bondholders on May 17, allowing it to avoid default, would be extended until July 24. It was due to end on June 26.

The company said it also has arrangements in place to ensure it has enough working capital for the duration of the standstill, which was agreed to by the group’s principal lenders and 81% of bondholders.

The publisher of the UK’s Independent newspaper is under pressure to repay some 1.4 billion euros of debt stacked up as it expanded around the globe. Like most newspaper companies, it has been hit by a slump in advertising in the wake of global recession.

Reuters this month reported that Independent News hired advisory firm North Sea to help negotiate a way through its debt crisis.

Its holding in APN, publisher of the NZ Herald newspaper, was diluted after it refrained from participating in the Australasian media company’s A$99 million capital raising because of a lack of funds.

Shares of APN traded at A$1.47 on the ASX on Friday. Shares of Independent News gained 6.4% to 25 euro cents on Friday and have shed 85% of its value in the past 12 months.

Businesswire.co.nz

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