Banks Charges on INM

[jmcc]

The article in the Sunday Business Post is quite interesting. Perhaps Brendan O'Connor's blubbering on a New Year's Eve Pravda/RTE programme about potentially losing his job may have been based on fact.

"A group of banks, led by AIB, has been granted a charge over three of Independent News & Media’s main Irish newspaper titles, as part of a credit facility negotiated at the end of last year."

Sunday Business Post | Irish Business News

This paragraph looks quite ominous:

"INM shares fell to a new low of 12.5c in Dublin last week, giving the group a market capitalisation of €105 million. The group has net debt of over €1.2 billion. INM executives and advisers are still in discussions with potential investors to raise €200 million in new financing, in order to repay a bond due in May. It is not clear whether a new bond will be successfully raised, or whether the group will opt for an alternative form of borrowing such as mezzanine finance, which would carry a very high interest rate in the current market."

Could we see a breakup of the INM group this year with at least one title going to the wall? Perhaps someone with a good knowledge of debt:equity ratios and financial engineering can explain INM's situation to us? Is the technical term for such a company entering a recessionary market "f*cked"?

Regards...jmcc

[kerrynorth]

Its pretty fecked at the moment. Revenue is collapsing as both advertising and copy sales are under big pressure and there is just no scope to increase cover prices. On the spending side the cost of their debt financing is going to soar as it matures and risk is repriced to reflect the new reality. At its present capitalisation the markets are in effect betting at short odds that the Indo will not make it through the recession.

[jmcc]

Its pretty fecked at the moment. Revenue is collapsing as both advertising and copy sales are under big pressure and there is just no scope to increase cover prices. On the spending side the cost of their debt financing is going to soar as it matures and risk is repriced to reflect the new reality. At its present capitalisation the markets are in effect betting at short odds that the Indo will not make it through the recession.

If INM fails to raise the finance to pay the bond in May could INM be forced into receivership in the same way Waterford Crystal was? And would this result in the wonderful irony of INM, considering Sor Anto's involvement in the Eircom debacle, being asset-stripped and broken up?

Regards...jmcc

[kerrynorth]

If INM fails to raise the finance to pay the bond in May could INM be forced into receivership in the same way Waterford Crystal was? And would this result in the wonderful irony of INM, considering Sor Anto's involvement in the Eircom debacle, being asset-stripped and broken up?

Regards...jmcc

It may well raise the finance to rollover the debt, but at what price? A coupon of 10% maybe raising its costs massively as revenue collapses. The only part of INM that is probably saleable at the moment are its Australian interests which are profitable but this will leave it the rump of the Group with a lot of loss making titles like the London Independent and the Sunday Tribune. A scenario that will only bring the evil day closer.

[adamirer]

The papers are profitable (bar the above two) , just not as profitable as previous years. Still, wondering will any irish bank have the balls to go for the jugular of the largest irish paper group.

[jmcc]

The papers are profitable (bar the above two) , just not as profitable as previous years. Still, wondering will any irish bank have the balls to go for the jugular of the largest irish paper group.

Well with all the nationalisation and state funding of the banks, will the INM group of papers be somewhat more appreciative of the government and the banks?

I think that the banks have the knife at the jugular of INM now and if they see their investment jeopardised they will move quickly.

Regards...jmcc

[adamirer]

Sure they were predicting 250m+ profits this year.... of cours,e they announced that 3 days after forcing their staff into a 5-10% pay cut.

[jmcc]

Sure they were predicting 250m+ profits this year.... of cours,e they announced that 3 days after forcing their staff into a 5-10% pay cut.

I think that its projected profit may be overtaken by events. If the current government falls in April/May then the position of INM may take a turn for the worse given its FF sycophancy.

Regards...jmcc

[jmcc]

According to RTE's Aertel, the price on INM shares is 10c each today. Will it go lower? Will Sor Anto be looking for a bailout too?

0946: Down to 9c.

Regards...jmcc

[constitutionus]

well the shares are back down to 0.09c now so clearly the market has no faith in em.

and this on the back of sir anto falling out of the forbes billionaires list (why am i reminded of that episode of the simpsons when monty becomes only a milllionaire )

with the banks getting involved it could very easily decide certain changes are needed. scrapping that fecking glossy porn mag that comes with the sindo for instance.

maybe THATS what BOC meant about losing his job as he's editor of it.