IN&M agrees extension to 'standstill' credit agreement

by John Reynolds, mediaweek.co.uk 25-Jun-09, 11:10

LONDON - Independent News & Media, publisher of The Independent newspaper, has agreed an extension to its "standstill" credit agreement, which will give it more time to restructure its €200m (£170m) bond, according to reports.

The extension to the deal, which had originally been due to expire tomorrow (26 June), is believed to have been agreed after bondholders rejected the latest offer from the company, led by chief executive Gavin O'Reilly.

The company's proposal to undertake a rights issue, which would have involved shareholders parting with about €60m and giving bondholders a percentage cut from the sale of company assets, was knocked backed by bondholders.

They are reported to be looking for other solutions, which would give them an equity stake in IN&M, whose shares have lost more than 80% of their value over the past year.

However, Denis O'Brien, the company's second largest shareholder, is thought to be reluctant to hand over an equity stake to bondholders.

The group is expected to release details of the extension to the "standstill" agreement tomorrow.

The negotiations come as IN&M looks to offload its national newspaper titles, The Independent and The Independent on Sunday, the online gambling company Cashcade and price comparison asset Verivox

Earlier this month, Media Week revealed an offer for the titles had been made by Alexander Lebedev, owner of the London Evening Standard.

IN&M declined to comment.