TIDMINM
RNS Number : 8103Z
Independent News & Media PLC
28 September 2009
?
NOT FOR DISTRIBUTION OR RELEASE, DIRECTLY OR INDIRECTLY, IN OR INTO ANY EXCLUDED
TERRITORY INCLUDING THE COMMONWEALTH OF AUSTRALIA, CANADA, JAPAN, NEW ZEALAND,
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JURISDICTION, THEIR TERRITORIES AND POSSESSIONS, WHERE IT WOULD BE UNLAWFUL
TO FORWARD, TRANSMIT OR DISTRIBUTE THIS ANNOUNCEMENT.
Independent News & Media PLC
Outline Agreement Reached on Financial Restructuring
* EUR350 million reduction in Net Debt through Equitisation of Bonds, Rights Issue
and Disposals
* Proposed Senior Debt Facilities based on 4 ½ Year Term
* Rights Issue to raise up to EUR94 million for discharge of Bond claim
Dublin/London - 28th September 2009: The Board of Independent News & Media PLC
("INM" or "the Company") announces that it has reached an agreement in principle
with the Ad Hoc Committee of Bondholders in relation to the proposed financial
restructuring ("Restructuring") of the Group's balance sheet and the Board has
formally agreed to proceed with the Restructuring on the terms outlined below.
INM's Banks have indicated that they are supportive of the Company pursuing this
Restructuring.
The Restructuring will deliver INM's stated objective of achieving a consensual
solution (capable of implementation outside of a Court-administered process)
that recognises the economic interests of, and preserves value for, all
stakeholders in the business, achieves significant deleveraging, facilitates the
participation of existing Shareholders, and allows for the restoration of the
INM Group to a position of financial stability.
The key features of the Restructuring are:
* EUR123 million of the outstanding principal amount of the Bonds to be exchanged
for 723.2 million New Ordinary Shares representing 46% of the Then Issued Share
Capital, with the balance of the Bondholders' claim (including accrued but
unpaid interest) being applied to underwrite a Rights Issue;
* INM existing Shareholders to be offered an opportunity to participate in the
Restructuring by means of a Rights Issue of up to EUR94 million at a Rights Issue
Price of EUR0.05 per Rights Issue Share;
* INM existing Shareholders able to retain approximately 52% equity interest
(assuming Shareholders take up their full rights entitlements);
* Proposed Senior Debt Facilities based upon a 4 ½ year maturity and revised
financial covenants to provide adequate headroom to accommodate prevailing
trading conditions and expectations; and
* As part of the foregoing, the parties to the Restructuring have consented to the
disposal of certain businesses (as previously announced) for an aggregate sum of
approximately EUR150 million. One of these disposals, INM Outdoor, will be subject
to a vote at a specially-convened extraordinary general meeting of shareholders,
details of which will follow in due course.
In making its decision to proceed with the Restructuring on the terms outlined
in this Announcement, the Board has duly considered all other proposals
including the proposal received from Mr. Denis O'Brien (details of which have
been widely commented upon in the media). The Board determined, supported by the
financial and legal advice provided to it, that the Company's Restructuring
delivers a superior outcome (specifically for existing Shareholders and
Bondholders) with materially less execution risk compared to any other proposal
received.
The Restructuring involves a number of conditions and steps to implementation.
It is conditional, inter alia, upon Bondholder consent (approval by Bondholders
representing at least 75% by value of the aggregate principal amount of Bonds
held by persons attending a meeting (in person or by proxy) of Bondholders). The
Ad Hoc Committee of Bondholders, whose holdings represent in aggregate 39% of
the outstanding principal of Bonds, are supportive of the Restructuring and have
agreed to it in principle. It is also conditional upon Bank credit committee
approvals and subsequent facility agreements having been entered into, and
requisite Shareholder approvals to, inter alia, implement the Rights Issue.
Commenting on the Restructuring, Mr. Gavin O'Reilly, Chief Executive Officer
stated:
"After intensive negotiations over a number of months, the Company is pleased to
be able to announce that an outline restructuring has been agreed in principle
with the Ad Hoc Committee of Bondholders, which also has the broad support of
our Banks. The Company acknowledges the support of its Banks and the Ad Hoc
Committee throughout its restructuring discussions and in reaching this key
milestone.
"This Restructuring will provide the INM Group with a EUR350 million reduction in
net debt in 2009 (through the combination of the equitisation of the Bonds, the
Rights Issue and the Group's previously-announced disposal programme) and a
stabilised financial position.
"We now expect that all parties will move towards implementation of the
Restructuring without delay, including procuring necessary consents and
approvals.
"With economic fundamentals expected to recover over the medium-term, INM's
market-leading assets, restructured balance sheet and improved financial
situation leave the Company very well positioned to benefit from any cyclical
economic recovery."
Details of the First Equity Issue
Approximately EUR123 million of the outstanding principal amount of the Bonds will
be exchanged for 723.2 million New Ordinary Shares (being the amount of the
available authorised but unissued share capital of the Company) representing
46.3% of the Then Issued Share Capital.
The First Equity Issue will be conditional, inter alia, upon Bondholder consent
(approval by Bondholders representing at least 75% by value of the aggregate
principal amount of Bonds held by persons attending a meeting (in person or by
proxy) of Bondholders) and upon Bank credit committee approvals and subsequent
facility agreements having been entered into. New Ordinary Shares to be issued
under the First Equity Issue will carry an entitlement to participate in the
Rights Issue.
Details of the Rights Issue
The size of the Rights Issue will be equal to the balance of the Bond claim
(including accrued and accruing, unpaid interest during implementation of the
Restructuring) following the equitisation under the First Equity Issue.
Accordingly, the Rights Issue is referred to in this Announcement as being for
an "up to" amount which assumes completion of implementation by 31 December,
2009. On this basis, the Rights Issue will not be in excess of EUR94 million.
The Rights Issue Price is EUR0.05. This represents a discount of approximately 81%
to the closing market price per Share on the Irish Stock Exchange on 28th
September, 2009 (the date of this Announcement) and a discount of approximately
71% to the First Equity Issue Price. The Rights Issue will be made to all
Qualifying Shareholders. The Record Date for participation in the Rights Issue
has not yet been determined and will not occur until after the First Equity
Issue.
The Rights Issue will be fully underwritten by the Bondholders with the balance
of their Bond claim remaining after the First Equity Issue. Accordingly, to the
extent that Rights Issue Shares are subscribed for under the Rights Issue, the
cash proceeds thereof will be paid on closing to discharge an equivalent amount
of the Bond claim. To the extent that the Rights Issue Shares are not taken up,
Bondholders will receive New Ordinary Shares at EUR0.05 to discharge the remainder
of their claim. Taken together with the First Equity Issue, this will satisfy
the outstanding amount of the Bond claim in full. Bondholders will also receive
a 5% underwriting fee in respect of their obligations with respect to the Rights
Issue, which will be payable in New Ordinary Shares at the Rights Issue Price.
In the event of 100% subscription under the Rights Issue (excluding the
Bondholders pro rata Rights Issue entitlement), Bondholders would following
Completion be interested in approximately 47% of the Enlarged Issued Share
Capital of the Company. In the event of no subscription under the Rights Issue,
Bondholders would following Completion be interested in approximately 76% of the
Enlarged Issued Share Capital of the Company.
The Bondholders are a diverse group of international, primarily institutional,
holders, with individual retail holders also included, and as such, and save for
the purposes of the realisation of their Bond claim, they do not, and will not
represent an homogenous group. The largest single Bondholder is interested in
EUR20 million of the Bonds, which following the First Equity Issue would represent
a maximum individual holding of 4.6% of the Then Issued Share Capital.
The Rights Issue will be conditional, inter alia, upon:
* the First Equity Issue having previously occurred;
* the approval by Shareholders at an extraordinary general meeting of a number of
Share Capital Resolutions necessary to facilitate the Rights Issue, including a
special resolution to disapply pre-emption rights in order to provide
flexibility for dealing with Overseas Shareholders and fractional entitlements;
* the Underwriting Agreement having become unconditional in all respects (save for
the condition relating to Admission) and not having been terminated in
accordance with its terms; and
* Admission becoming effective.
In the event that the special resolution necessary to effect the Rights Issue is
not approved, the Rights Issue will not occur and (assuming the other Share
Capital Resolutions are approved) the amount of the Bondholders' claim including
accrued interest remaining after the First Equity Issue will be equitised at a
price of EUR0.05. Together with the First Equity Issue, this would result in
Existing Shareholders being diluted by up to 76% without having the opportunity
to re-invest under the Rights Issue.
Denis O'Brien's Alternative Proposal
Over the course of the restructuring discussions, proposals from a number of
stakeholders in the Company have been considered. Most recently (and as widely
reported in the media), the Company has received a proposal from Mr. Denis
O'Brien. Mr. O'Brien is interested in 219,456,184 Ordinary Shares representing
26.14% of the Existing Issued Share Capital of the Company, and has three Board
nominees, Messrs. Paul Connolly and Leslie Buckley and Ms. Lucy Gaffney.
The Company notes Mr. O'Brien's expressed interest in acquiring control of the
Company by means of an investment of EUR100 million at a price of EUR0.0142 per
share (a discount of approximately 95% to the closing market price per Share on
the Irish Stock Exchange on 28th September, 2009 - the date of this
Announcement) for 67% of the Company. The Board has carefully considered Mr.
O'Brien's proposal in light of, inter alia, the response from certain key
stakeholders whose support would be necessary for its implementation. In
particular, the Ad Hoc Committee has stated categorically to the Company that
the proposal from Mr. O'Brien is unacceptable to it. In addition,
representatives of Sir Anthony O'Reilly, the largest Shareholder in the Company
holding 28.01% of the Existing Issued Share Capital of the Company - a stake
capable of blocking those special resolutions which would be required to
implement Mr. O'Brien's proposals - have stated that he would not be prepared to
support Mr. O'Brien's unilateral proposal.
These factors, together with the significant competition law and media plurality
issues associated with an assumption of control by Mr. O'Brien of Ireland's
largest media group, and, inter alia, significant differences in the value being
attributed to the existing Shares (Mr. O'Brien's proposal would dilute existing
shareholders by 92%, with their residual 8% holding having a value on Mr.
O'Brien's investment terms of only EUR12 million) were taken into account by the
Board in deciding to proceed with the Restructuring on the terms detailed in
this Announcement.
Notwithstanding today's Board decision, it remains open to any party to put
forward an alternative and viable proposal, which provides better economics for
stakeholders, with no added execution risk and which is deliverable on a timely
basis relative to the Restructuring. Any such proposal would be further
considered by the Board.
Further Information
Further announcements and various Bondholder and Shareholder documentation will
be issued in due course, together with a timetable for the Rights Issue.
For further information, please contact:
+--------------------------+--------------------+--------------+
| Independent News & Media | Davy | North |
| PLC | Hugh McCutcheon | Sea |
| Gavin O'Reilly | Eugenée Mulhern | Partners |
| Chief Executive Officer | Tel: + 353 1 679 | Michael |
| Donal Buggy | 6366 | Brennan |
| Chief Financial Officer | | Brian |
| Tel: + 353 1 466 3200 | | McKeon |
| | | Tel: +1 |
| | | 212 901 1509 |
| | | |
+--------------------------+--------------------+--------------+
| Media | Rory Godson/ Paul | Investors |
| Pat Walsh | Durman | and |
| Murray Consultants | Powerscourt | Analysts |
| (Dublin) | (London) | Mark |
| Tel: +353 1 498 0300 | Tel: +44 20 7250 | Kenny/ |
| | 1446 | Jonathan |
| | | Neilan |
| | | K Capital |
| | | Source |
| | | (Dublin) |
| | | Tel: +353 |
| | | 1 631 5500 |
| | | |
+--------------------------+--------------------+--------------+
This Announcement does not constitute, or form part of, an invitation or offer
of securities for subscription, sale or purchase to any person, to be issued or
sold in connection with the Restructuring. Any purchase of, or application for,
securities referred to in this Announcement should only be made on the basis of
information contained in the Prospectus to be published by the Company in due
course in connection with the Restructuring. The Prospectus will contain
detailed information about the Rights Issue, INM and its management, as well as
financial information.
Participation in the Rights Issue will not be available to Shareholders resident
in the United States, the Commonwealth of Australia, the Republic of South
Africa, Japan, Canada, New Zealand, Switzerland or any other jurisdiction where
it would be unlawful to offer participation (each "an Excluded Territory").
The offer of the New Ordinary Shares in certain jurisdictions may be restricted
by law and therefore potential investors should inform themselves about and
observe any such restrictions. The Nil Paid Rights, the Fully Paid Rights, the
Provisional Allotment Letters and the New Ordinary Shares will not be registered
under the US Securities Act or under any securities laws of any state or other
jurisdiction of the United States or any other Excluded Territory and may not be
offered, sold, taken up, exercised, resold, renounced, transferred or delivered,
directly or indirectly, within the United States or any other Excluded Territory
except pursuant to an applicable exemption from the registration requirements of
the US Securities Act (in the case of the United States) and in compliance with
any applicable securities laws of any state or other jurisdiction of the United
States or any other Excluded Territory. There will be no public offer in the
United States or any other Excluded Territory.
The distribution of this announcement or any other document issued by the
Company in connection with the Rights Issue and the transfer of Nil Paid Rights,
Fully Paid Rights and New Ordinary Shares into jurisdictions other than Ireland
and the United Kingdom may be restricted by law and therefore, persons into
whose possession these documents come should inform themselves about and observe
such restrictions. Any failure to comply with any such restrictions may
constitute a violation of the securities laws or regulations of such
jurisdictions. In particular, subject to certain exceptions, this announcement
and any other documents issued by the Company in connection with the Rights
Issue should not be distributed, forwarded to or transmitted in any Excluded
Territories.
Davy (which is regulated in Ireland by the Financial Regulator) is acting
exclusively for INM as financial adviser and as sponsor for the purposes of the
Listing Rules of the Irish Stock Exchange and the Listing Rules of the UK
Listing Authority, and no one else in connection with the Restructuring and will
not regard any other person (including the recipients of this document) as a
client in relation to the Restructuring and will not be responsible to anyone
other than the Company for providing the protections afforded to its customers
or for providing advice in relation to the Restructuring or any other matters
referred to in this document. Apart from the responsibilities and liabilities,
if any, which may be imposed by the Financial Regulator or any applicable Irish
law, Davy makes no representation, express or implied, with respect to the
accuracy, verification or completeness of any information contained in this
document and accepts no responsibility for, nor does it authorise, the contents
of this document or its publication, or any other statement made or purported to
be made by the Company, or on its behalf, in connection with the Restructuring,
the Rights Issue, Admission, the New Ordinary Shares or any of the other
arrangements described in this document, and accordingly disclaims all and any
liability whatsoever whether arising out of tort, contract or otherwise which it
might otherwise have to any person other than INM in respect of this document or
any other statement.
North Sea (which is authorised and regulated in the UK by the FSA) is acting
exclusively for INM as financial adviser and no one else in connection with the
Restructuring and will not regard any other person (including the recipients of
this document) as a client in relation to the Restructuring and will not be
responsible to anyone other than the Company for providing the protections
afforded to its customers or for providing advice in relation to the
Restructuring or any other matters referred to in this document. Apart from the
responsibilities and liabilities, if any, which may be imposed by the FSA, the
Financial Regulator or any applicable law, North Sea makes no representation,
express or implied, with respect to the accuracy, verification or completeness
of any information contained in this document and accepts no responsibility for,
nor does it authorise, the contents of this document or its publication, or any
other statement made or purported to be made by the Company, or on its behalf,
in connection with the Restructuring, the Rights Issue, Admission, the New
Ordinary Shares or any of the other arrangements described in this document, and
accordingly disclaims all and any liability whatsoever whether arising out of
tort, contract or otherwise which it might otherwise have to any person other
than INM in respect of this document or any other statement.
This document and any materials distributed in connection with this document may
contain certain forward-looking statements regarding the belief or current
expectations of INM, the Directors and other members of its senior management
about INM's financial condition, results of operations and business and the
transactions described in this document. Generally, but not always, words such
as 'may', 'could', 'should', 'will', 'expect', 'intend', 'estimate',
'anticipate', 'assume', 'believe', 'plan', 'seek', 'continue', 'target'. 'goal',
'would' or their negative variations or similar expressions identify
forward-looking statements. Such forward-looking statements are not guarantees
of future performance. Rather, they are based on current views and assumptions
and involve known and unknown risks, uncertainties and other factors, many of
which are outside the control of the INM and are difficult to predict, that may
cause the actual results, performance, achievements or developments of the Group
or the industries in which it operates to differ materially from any future
results, performance, achievements or developments expressed or implied from the
forward-looking statements. A number of material factors could cause actual
results to differ materially from those contemplated by the forward-looking
statements.
This Announcement is not a Prospectus. A Prospectus in relation to, inter alia,
the Rights Issue will be published by the Company in due course. Investors
should rely on the information contained in the Prospectus and any documents
incorporated therein by reference.
The following defined terms used in this Announcement have the following
meaning:
+-------------------------------------+-------------------------------------+
| "Ad Hoc Committee" | the committee of Bondholders formed |
| | for the purposes of participating |
| | in the restructuring discussions |
| | whose interests represent in |
| | aggregate 39% of the outstanding |
| | principal of the Bonds; |
+-------------------------------------+-------------------------------------+
| "Admission" | Admission of shares to the official |
| | lists of the Irish Stock Exchange |
| | and the UK Listing Authority; |
+-------------------------------------+-------------------------------------+
| "Announcement" | this announcement dated 28th |
| | September, 2009; |
+-------------------------------------+-------------------------------------+
| "Banks" | the eight banks providing senior |
| | facilities to the INM Group |
| | (excluding APN News &Media |
| | Limited); |
+-------------------------------------+-------------------------------------+
| "Bondholder(s)" | holders of the Group's May 2009 |
| | EUR200 million 5.75% Bond, or any one |
| | of them as the context may require; |
+-------------------------------------+-------------------------------------+
| "Bonds" | the Group's May 2009 5.75% Bond; |
+-------------------------------------+-------------------------------------+
| "Completion" | completion of the Restructuring; |
+-------------------------------------+-------------------------------------+
| "Davy" | J&E Davy and Davy Corporate |
| | Finance; |
+-------------------------------------+-------------------------------------+
| "Existing Issued Share Capital" | 839,595,903 Ordinary Shares in INM |
| | (excluding treasury shares) in |
| | issue as at the close of business |
| | on 28th September, 2009 (the latest |
| | practicable date prior to the issue |
| | of this Announcement); |
+-------------------------------------+-------------------------------------+
| "Enlarged Issued Share Capital" | the Existing Issued Share Capital, |
| | the New Ordinary Shares to be |
| | issued under the First Equity Issue |
| | and the Rights Issue Shares; |
+-------------------------------------+-------------------------------------+
| "Excluded Territories" | territories into which the Rights |
| | Issue will not be made; |
+-------------------------------------+-------------------------------------+
| "First Equity Issue" | the issue of 723.2 million New |
| | Ordinary Shares in exchange for |
| | EUR123 million of the Bond principal; |
+-------------------------------------+-------------------------------------+
| "First Equity Issue Price" | the price per New Ordinary Share |
| | under the First Equity Issue, being |
| | EUR0.17; |
+-------------------------------------+-------------------------------------+
| "FSA" | the Financial Services Authority; |
+-------------------------------------+-------------------------------------+
| "FSMA" | the Financial Service and Markets |
| | Act 2000 of the United Kingdom; |
+-------------------------------------+-------------------------------------+
| "Fully Paid Rights" | rights which are provisionally |
| | allotted to Qualifying Shareholders |
| | pursuant to the Rights Issue and |
| | which have been recorded in the |
| | register of the Company as having |
| | been paid at the Rights Issue |
| | Price; |
+-------------------------------------+-------------------------------------+
| "INM" or "the Company" | Independent News & Media PLC; |
+-------------------------------------+-------------------------------------+
| "INM Group" or "the Group" | the Company and its subsidiaries; |
+-------------------------------------+-------------------------------------+
| "Irish Stock Exchange" | The Irish Stock Exchange Limited; |
+-------------------------------------+-------------------------------------+
| "Issuer" | the issuer of the Bonds, being |
| | Independent News & Media (Finance) |
| | Limited; |
+-------------------------------------+-------------------------------------+
| "New Ordinary Shares" | new Ordinary Shares to be issued |
| | under the Restructuring; |
+-------------------------------------+-------------------------------------+
| | |
+-------------------------------------+-------------------------------------+
| "Nil Paid Rights" | rights to acquire New Ordinary |
| | Shares under the Rights Issue, nil |
| | paid; |
+-------------------------------------+-------------------------------------+
| "North Sea" | North Sea Partners LLC; |
+-------------------------------------+-------------------------------------+
| "Ordinary Shares" or "Shares" | ordinary shares of nominal value |
| | EUR0.05 each in the capital of the |
| | Company; |
+-------------------------------------+-------------------------------------+
| "Overseas Shareholder(s)" | Shareholders in Excluded |
| | Territories; |
+-------------------------------------+-------------------------------------+
| "Proposed Senior Debt Facilities" | the proposed senior debt facilities |
| | to be entered into by the INM Group |
| | with the Banks; |
+-------------------------------------+-------------------------------------+
| "Provisional Allotment Letter(s)" | the provisional allotment letters |
| | to be issued in connection with the |
| | Rights Issue; |
+-------------------------------------+-------------------------------------+
| "Qualifying Shareholder(s)" | Shareholders having an entitlement |
| | to participate in the Rights Issue, |
| | being existing shareholders on the |
| | Record Date other than Overseas |
| | Shareholders; |
+-------------------------------------+-------------------------------------+
| "Restructuring" | the restructuring as detailed in |
| | this Announcement, including the |
| | First Equity Issue and the Rights |
| | Issue; |
+-------------------------------------+-------------------------------------+
| "Record Date" | the record date for participation |
| | in the Rights Issue (not yet |
| | determined); |
+-------------------------------------+-------------------------------------+
| "Rights Issue" | the proposed rights issue of up to |
| | EUR94 million to be underwritten by |
| | Bondholders; |
+-------------------------------------+-------------------------------------+
| "Rights Issue Price" | EUR0.05 per Rights Issue Share; |
+-------------------------------------+-------------------------------------+
| "Rights Issue Share(s)" | the new ordinary shares to be |
| | issued under the Rights Issue, |
| | including shares which may be |
| | issued in discharge of the related |
| | underwriting fees; |
+-------------------------------------+-------------------------------------+
| "Shareholder(s)" | holders of Ordinary Shares; |
+-------------------------------------+-------------------------------------+
| "Share Capital Resolutions" | resolutions for the increase of the |
| | authorised share capital of the |
| | Company and for the grant to the |
| | Directors of the share allotment |
| | authorities necessary to implement |
| | the Restructuring; |
+-------------------------------------+-------------------------------------+
| "Standstill Agreement" | the standstill agreement between |
| | the Banks, the Ad Hoc Committee and |
| | certain members of INM Group dated |
| | 16 May, 2009 (as amended and |
| | restated on 26 June, 2009, 24 July, |
| | 2009, 27 August, 2009 and 25 |
| | September, 2009); |
+-------------------------------------+-------------------------------------+
| "Then Issued Share Capital" | the shares in issue following the |
| | First Equity Issue (assuming no |
| | other share issues); |
+-------------------------------------+-------------------------------------+
| "UK Listing Authority" | the Financial Services Authority |
| | acting in its capacity as the |
| | competent authority for the |
| | purposes of Part VI of the |
| | Financial Services and Markets Act |
| | 2000 of the United Kingdom; and |
+-------------------------------------+-------------------------------------+
| "Underwriting Agreement" | an agreement to reflect the |
| | underwriting commitment of the |
| | Bondholders in respect of the |
| | Rights Issue. |
+-------------------------------------+-------------------------------------+
This information is provided by RNS
The company news service from the London Stock Exchange
END
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