INM capital plan is passed despite anger on pensions
Shareholders at Belfast Telegraph publisher Independent News and Media (INM) have overwhelmingly approved a capital restructuring plan that could lead to the resumption of dividends for the first time since the onset of the financial crisis.
An extraordinary general meeting (EGM) in Dublin convened to consider two motions.
The meeting was overshadowed, however, by a separate protest from current and former employees of the company.
This followed an announcement last month by INM - which also publishes the Sunday Life - that the company will no longer contribute to its defined benefit pension scheme, a move that will lead to the closure of the scheme which has a €23m (£19.5m) deficit.
INM chairman Leslie Buckley, a long time associate of businessman Denis O'Brien - INM's largest single shareholder with a 29.88% stake - fielded a series of angry questions and statements from several shareholders. The board heard concerns from Giles Kerr, a shareholder and corporate governance consultant, who said he was "dismayed" to read media reports about a boardroom row over a proposal to acquire Dublin-based radio station Newstalk, owned by Mr O'Brien's Communicorp.
Mr Buckley, who said the two restructuring resolutions arose because INM had "greatly overvalued" assets in the past, declined to comment on the now highly public boardroom row between Mr Buckley and INM chief executive Robert Pitt over the potential acquisition of Newstalk.
And he said it was "totally inappropriate" to comment on the scheme, as pension trustees are currently talking to the company.
Mr Buckley was pressed by National Union of Journalists Irish secretary Seamus Dooley, who said he failed to see how questions around the defined benefit pension scheme were not relevant to the resolutions. "I believe that it is possible to restructure the company and it is possible to pay dividends without ensuring that people are put in pension poverty." said Mr Dooley.
Mr Buckley said that both he and the board understood the concerns of the pension trustees. "Unfortunately it is not appropriate for me to comment because there are ongoing discussions taking place between your pension trustees and the company," he said. When asked what implications the pension closure will have on INM's balance sheet, the company's chief financial officer Ryan Preston said he couldn't comment, as the company hadn't reached an agreement with the trustees.
"There is no cash gain for the company, so we are not benefiting in a cash way," said Mr Preston.
Shareholders were asked to back two resolutions aimed at cleaning up the media group's balance sheet.
The resolutions were defeated by a show of hands in the meeting, but carried overwhelmingly by investors including Mr O'Brien and businessman Dermot Desmond who holds a 15% stake in INM via his IIU Nominees vehicle.
Both resolutions passed, with 99.88% of the votes. In Dublin, INM shares closed up 1.72% at €0.118 each following the meeting. The resolutions related to the write-off of €1.1bn (£0.9bn) of losses the current board "inherited".
"In the period from 1988 to 2008, the company expanded overseas and acquired international media assets in a diverse range of countries such as Australia, India, New Zealand, South Africa and the UK," said Mr Buckley.
The Dublin-based company also publishes the Irish Independent and Sunday Independent and owns websites www.belfasttelegraph.co.uk and independent.ie.