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Independent granted banks charge over three key titles
Sunday, March 08, 2009 By Richard Curran
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.

The charge covers shares in several key INM subsidiaries and a specific charge over the Irish Independent, Sunday Independent and Evening Herald titles.

The amount of the loan is not specified, but Companies Office filings show that AIB, as lead banker in the facility, was also granted the charge over the companies that own the Independent newspaper titles in London, and the subsidiary , Independent Communications (International) Ltd, which owns a controlling stake in Tribune Newspapers plc, publisher of the Sunday Tribune.

Independent Communications (International) Ltd has lent money to Tribune Newspapers and, in turn, holds a charge of The Sunday Tribune title.

The granting of a charge directly over the three newspaper titles, and not just the companies that own them, is seen as unusual. It reflects both the weakened value of shares in INM plc, and the desire by the banks to take out security over specific assets such as the titles. The three titles are owned by an INM subsidiary called Independent Newspapers Marketing Ltd.

An INM spokesman said the company had informed the market of fixed and floating charges when it gave an update to the Stock Exchange on January 26. At the time, the company said: ‘‘Under the group’s bank facility agreements, group members in Ireland and the UK have granted fixed and floating charges to their lending banks over assets located in Ireland and the UK.”

However, the extent of the details of those charges and the extent of the security granted to the banks emerged in documents filed with the Companies Office in the middle of last month. The Companies Office filings also detail a set of circumstances where floating charges over companies crystallise into fixed charges over particular assets.

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.

INM is currently disposing of a number of non-core assets, with a view to raising up to €100 million. It has also signalled an interest in selling its stake in Australia’s APN News and Media, and there has been speculation that it may offload the Independent in London.

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