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An uneasy six-month truce at Independent News & Media collapsed today as its second-largest shareholder Denis O'Brien called for an immediate sale or the closure of The Independent and The Independent on Sunday.
O'Brien, who owns 26% of INM's shares, has called for an extraordinary general meeting which would also vote on ending €300,000 (£264,000) a year payments to the publisher's founder and now President Emeritus Tony O'Reilly.
INM dismissed O'Brien's claims saying that immediate closure of the London newspapers would incur significant “contractual costs” and denying that O'Reilly either has a contract or received payments in his new role.
O'Reilly and his family own 28% of INM's shares and have battled with O'Brien who is one of Ireland's top business tycoons for more than three years. The two men appeared to put aside their fight for more than six months as the publisher struggled to renegotiate its huge debt burden with banks and bondholders. But as part of their truce O'Reilly stepped down from the board.
INM owes around €1.3 billion and has been trying to put together a debt for equity swap but has met increasing pressure from holders of 200 million worth of bonds that were due for repayment last May. So far there have been four standstill agreements on debt and interest payments.
Today's shock requisitioning of an EGM means hostilities have firmly resumed. O'Brien can force the meeting to take place because he owns more than 10% of the shares.
What is less clear is how other shareholders will line up when it comes to the votes. Many are said to be losing patience with the ongoing lack of progress on the debt negotiations. INM shares dropped 1.25 eurocents to 25 eurocents having been as high as 48 cents at the start of this year.
Only last Friday, Gavin O'Reilly, chief executive of INM and son of Tony, said that the London broadsheet titles were not for sale and should be at least breaking even by the end of next year.
But O'Brien has lost patience with the existing management's lack of action and wants the board of INM — on which he holds three seats — to be authorised immediately to sell or close the titles.
He is also demanding that all directors' expenses for the past nine years should be scrutinised by independent accountants and then circulated to shareholders within three weeks of the meeting.
O'Brien is also calling for the axing of former Irish politician Brian Hillery as chairman of INM, the appointment of a new senior independent director and the closure of the publisher's executive office in London.
INM pointed out that previously O'Brien had supported many of the matters he is now attacking including Hillery's appointment as chairman.
Another of O'Brien's eight resolutions wants the publisher to cancel a sizeable contract with Canadian public relations firm Cansult Communications. He also wants the board to
halt the sale of the group's outdoor poster advertising business in South Africa.
Reader views (9)
dubai:peter,u mean hari's article?i was shocked by it but i've never been to dubai.
- Kimon, monaco, 03/09/2009 08:06
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Good riddance to bad rubbish! This newspapers oxymoronic title defied the Trade Descriptions Act for far too long!
RIP [not] Independent!!
- James Macleod Ritchie, Oyster Bay Cove, 03/09/2009 01:06
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I don't think I've ever seen a soul reading the Independent. Does anybody really care whether it lives or dies?
- Bill A, Marylebone, 02/09/2009 19:25
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Who in their right mind could regret the passing of this pretentious so-called high-brow rag with its hideously 'right-on' eco-warrior, end-of-the-world-is-nigh front page headlines? Good riddance to politically correct rubbish. Independent? It increasingly wasn't.- Were you?
- James Murphy, Petersfield, 02/09/2009 17:42
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In a democracy where it's essential we have a free press, the readers must be able to
enjoy as many views as possible. Heaven knows what we would suffer if the self-serving politicians had no one to check their greed. The pen is mightier than the sword.
- Kevin, London England, 02/09/2009 16:26
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this is disastrous news for the UK media. Hope that Tony and Gavin can cobble together a deal that saves the day. It would be a very sad day if the Indy had to close but I suspect that this latest threat will concentrate minds.
- Mp, london, 02/09/2009 16:22
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I wish INM would sell its profitable newspapers in SA. They control most of them to the detriment of the population as a whole.
- Gordonbay, London and Cape Town, 02/09/2009 16:13
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The Independent's lamentable fiction about Dubai was the beginning of its end!
- Peter, Dubai, UAE, 02/09/2009 14:26
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I've been a loyal reader since the first copy rolled off the presses. My, how it revolutionised newspaper appearances and trends! Those early editions famed for its terrific photography. Photographs of the deaprted in the obituaries, punning crossword solutions in its concise versions, the "second sections". The list goes on. The Times and The Grauniad certainly aped it, even when The Indy had the courage to go tabloid size! I do hope it can be rescued!
- Michael Spencer, Toronto, Canada, 02/09/2009 13:25
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