A New Zealand investment fund has not completed the purchase of €130 million in loan notes that it was due to buy from Independent News and Media by the end of 2007.

Last October, New Zealand-based Equity Partners Media and Communications (EPM&C) agreed to subscribe for NZ$250 million (€130 million) in loan notes that the Irish group was due to issue. Under the transaction's terms, EPM&C paid for NZ$2.5 million worth of the loan stock, and was supposed to pay the NZ$247.5 million balance by the year's end. This was subject to market conditions and neither party terminating the agreement.

But it emerged yesterday that the New Zealand investor has yet to pay for the balance of the loan notes, and it was not clear if the Independent News and Media was going to issue them as planned last October. It is understood that the Irish company will update stock markets on the status of the rights issue ahead of publishing its 2007 results on March 19th.

Independent News and Media, controlled by Sir Anthony O'Reilly, announced the issue of the loan notes at the same time that NZ$225 million in preference shares issued by the company were due to mature.

Most of the preference shareholders opted to exchange these instruments, used as a means of borrowing money, for ordinary stock instead of having their cash repaid.

As a result, it is understood that Independent News did not need the cash that it would have raised through the issue of the loan notes to EPM&C.

The loan notes give holders the right to convert them to shares when they are due to be repaid in 2017.