Independent News investor wants vote on refinancing
* O'Brien seeks to block a deal that dilutes his stake
* O'Reilly would give up one-half of his stake-report
(Adds comment from company in paras 6-7)
DUBLIN, Sept 14 (Reuters) - A deal between Independent News & Media Plc (INME.I) and bondholders that would dilute equity interests should be put to a shareholder vote, a key investor said on Monday, threatening to derail a potential refinancing agreement.
The heavily indebted media group has been trying for months to refinance a 200-million-euro issue that was meant to be paid in May, and there has been speculation that bondholders will receive a substantial equity stake to secure the Dublin-based company's financial future.
But Denis O'Brien, Independent News' second-largest shareholder after the O'Reilly family, said refinancing proposals would be highly dilutive, and he has called for such a plan to be put to investors in an extraordinary general meeting
(EGM).
"I will be asking the board to recommend the resolution which would see a sensible solution approved and any attempt to circumnavigate shareholders blocked," the telecommunications billionaire said in a statement.
O'Brien has a 26 percent stake in the firm.
Independent News & Media said in a statement that all matters requiring shareholder approval would be put to a vote.
"The company's consistent focus is to achieve a consensual agreement that is in the best interest of all stakeholders and considerable progress has been made in this regard," the company said.
The group, whose debt of 1.3 billion euros dwarfs its market value of around 240 million euros, has to call an EGM after O'Brien earlier demanded a meeting to force through changes in corporate strategy, including halting the planned disposal of its South African advertising business for 1.1 billion rand.
A date for the EGM has not yet been set.
Earlier Monday, the London Times newspaper reported that Anthony O'Reilly, who remains president emeritus of the group after standing down as chief executive in May following pressure from O'Brien, would give up his controlling stake in the group to rescue it.
Without citing sources, the newspaper said O'Reilly would accept a halving of his 30 percent stake in Independent News in return for its banks extending their loans to the group until 2014 and a resolution of the bond issue.
O'Reilly, who built Independent News from an Irish publisher to an international media empire over nearly four decades, has agreed that the bondholders will receive some cash plus new shares amounting to about one-half of the reconstructed company, the newspaper said.
Independent has until Sept. 25, the latest deadline, to seal a deal with bondholders.
(Reporting by Carmel Crimmins; Editing by Dan Lalor, Jeffrey Benkoe, John Stonestreet)
((carmel.crimmins@reuters.com; Reuters Messaging: carmel.crimmins.reuters.com@reuters.net; +353 1 500 1529)) Keywords: INDEPENDENTNEWS/
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