DUBLIN Independent News & Media is in talks with a consortium of its banks to restructure over 400 million euros ($534 million) of debt threatening the group's survival, INM's chairman said on Wednesday.
The Irish publisher is in negotiations with eight lenders as it tries to haul back a weight of debt as part of a major restructuring plan to offset a fall in profit and shrinking advertising revenues.
INM on Sunday sold its South African unit for 170 million euros as part of its restructuring that has also included the sale of its flagship British title the Independent, as well as interests in India and closing money-losing newspapers in Ireland.
"INM is currently in constructive and ongoing discussions with its banks and we are committed to securing a consensual solution on this basis," Leslie Buckley, chairman of INM said in a statement.
"INM will need urgent and substantial restructuring in response to high levels of debt and tough trading," he said.
Buckley said it is a "matter for negotiation" between INM and its banks in circumstances where burden sharing could occur and in cases where equity holders have already taken a hit on losses up to 90 percent.
A change in ownership at INM last year, after Irish telecoms billionaire Denis O'Brien tightened his grip by increasing his stake to 29.9 percent, prompted a period of boardroom upheaval that saw senior executives pushed out.
O'Brien's boost to become the company's largest shareholder brought an end to a long-running dispute with the O'Reilly family, who controlled Ireland's largest media group for three decades.
"INM is an operationally strong and well managed company yet its survival is threatened by a legacy of excessive borrowings and poor decisions including destructive share buy-backs and excessive dividends, all of which predate the current board," said Buckley.
(Reporting by Stephen Mangan; editing by Andrew Hay)