Independent News & Media is seeking to sell loss-making businesses over the next 12 months. In a market update yesterday (January 26), it says cash from disposals will go to paying off its £1.3bn debt.
The statement came after speculation over the weekend that The Independent and its Sunday sister title could be sold off, however, the group also includes online, radio and outdoor operations across Australia, Hong Kong, India, Indonesia, Ireland, New Zealand, South Africa and the UK.
It does not make it clear which assets it is considering selling, but The Independent and Independent on Sunday are reported to be losing £10m per year. Meanwhile, it says the deterioration in the credit market has ended discussions round a sales of its 39.1% share in Australasian media company APN News & Media.
INM, which is led by chairman Tony O’Reilly, says it has noted the “significant and unwarranted” decline in the group’s share price and adds that it believes that the current market capitalisation does not fairly reflect the “true value” of it assets. It share price rose to 26 Euro cents yesterday, having fallen by 57% over the past two weeks.
Its full year results are due on March 32 but it has revised its expectations ahead of that. The group says that its global businesses are showing resilience, which it adds “is underpinned by the fact that over 33% of INM’s Group revenues are not dependent on advertising markets.” But it adds, that revenue for 2008, although subject to full audit, is down by 3%.
It says it has contained the “sudden advertising contraction” that started in September with strong cost management across its divisions, and as a result it continues to be a profitable and cash-generative business.
The statement adds that INM does not expect any upturn in the global advertising market, and is forecasting that total publishing revenues will contract by about 4% to 6% over 2009.
In November, the group announced 90 job cuts across the daily and Sunday papers and it is moving into Kensington offices of Associated News in a bid to save £10m per year. It also scrapping the paper’s Life supplement just four months after it was launched (MW January 20), with redundancies expected.
Yesterday, it also imposed a 10% pay reduction and a cut bonuses for directors and its dividend.