DENIS O’BRIEN, Independent News Media’s second-biggest shareholder, said yesterday that there was only a “50-50 chance” of the Dublin-based listed media group refinancing a €200 million bond that is due to be paid on May 19th.
Speaking after addressing a seminar in Dublin on entrepreneurship organised by law firm Mason Hayes+Curran, Mr O’Brien said: “I’d say it’s 50-50 . . . .the bondholders are being totally unrealistic. They are overplaying their hand somewhat.”
He declined to comment on the precise negotiations taking place with bondholders.
Failure to refinance the bond could trigger a default that would greatly weaken management’s hand in its ongoing efforts to stabilise INM in the context of a sharp decline in advertising revenues across its media subsidiaries.
Mr O’Brien said refinancing the €200 million bond was “the first step” in restructuring INM’s balance sheet. “That has been our only focus,” he said in a reference to his recent appointment of three representatives to the board of INM as part of a major restructuring of its top brass following a rapprochement with Sir Anthony O’Reilly and his family.
Mr O’Brien said INM would publish its latest full-year results on Thursday after postponing their release twice in recent weeks. “It is likely that we’ll have to issue qualified unless bondholders become realistic,” he said.
INM, whose shares have lost more than 87 per cent of their value in the past year, has put its interests in online utility price comparison business Verivox and online casino software firm Cashcade on the market in a bid to generate much-needed cash.
Last year, it failed to sell its 39.1 per cent stake in Sydney-based APN News Media, which might have reduced its €1.4 billion debt to less than €600 million.
Mr O’Brien said these processes were “going well”, but deals were “unlikely to materialise until July or August”.
“I agree that we have to realise cash but selling businesses is not easy at this time.”
When asked about the potential divestment of the group’s loss-making Independent newspaper titles in London, Mr O’Brien said: “My view hasn’t changed. Either they are going to break even or we have to sell them.”
He declined to comment on what other assets might be sold as INM seeks to reduce its debts. Mr O’Brien said he has spent about €460 million buying shares in INM. This is now worth about €56 million.
Earlier, in response to a question from a delegate at the seminar, Mr O’Brien said: “I just can’t believe the situation that INM finds itself in at the moment . . . we are trying to save the business.”
Mr O’Brien was critical in his speech of the way the media has reported aspects of the recession and the banking crisis.
“The media are like hyenas. They are looking out for bad news. It’s self perpetuating.”
Mr O’Brien is one of Ireland’s biggest media owners. Apart from his stake in INM, he owns national radio stations Today FM and Newstalk and some local stations.
He was also critical of Irish economists and commentators writing negative articles about this country for international media. Without naming any person, he said they were “burying us” overseas.
In a light-hearted conclusion to his speech, Mr O’Brien relayed a conversation he had with his wife, Catherine, in January about cutting the family’s overheads and eliminating what he described as “conspicuous spending” in light of the global economic downturn.
“She said to me: ‘Denis, you have been brilliant with your investments but I have a few words for you . . . Indo, Indo, Indo’
and she told me to bugger off.”
