End game as banks reject latest O’Brien INM move

08 November 2009  By Samantha McCaughren

The latest proposals put by Denis O’Brien to Independent News and Media’s (INM) banks and bondholders have been rejected in recent days.

It is understood that INM’s banks rejected his most up-to date Rescue Co plan last Monday, while bondholders also turned down his revised offer last Thursday. In recent weeks, O’Brien has put forward a number of variations of his alternative debt restructuring plan to bondholders.

Time is now running out for O’Brien to get backing for a rival proposal. He has until tomorrow night to get backing from bondholders for any final revised offer he makes. The bondholders are due to meet on Tuesday to vote on the INM management proposal.

Sources said that, while the improved plans offered more cash and less equity to the bondholders, it was still considered less attractive to the INM management plan, which has been agreed with a large group of bondholders. This rejection of the latest O’Brien plan leaves the telecoms billionaire with fewer options.

His attempts to win favour with the bondholders may now be coming to an end. His original plan involved putting €100 million in the company and taking a majority stake in the media group.

While a committee representing 39 per cent of bondholders has already backed INM’s debt restructuring plans, a vote will be put to all bondholders on Tuesday. Backing of 75 per cent of them is needed.

If O’Brien had managed to peel off a group of bondholders he might have got the banks behind him and wrestled control of the company. However, this possibility seems to have escaped his grasp and he is running out of options.

O’Brien’s proposals to remove INM board members at an egm were rejected last week and another egm on Friday is expected to reject his proposals to restrict the company from issuing shares.

The only other options left in order to win control would appear to be some sort of legal action or buying more shares in the upcoming rights issue.