Independent News and Media has won an 11th-hour reprieve from its lenders and been given six weeks to get its finances back in order.
The publisher warned at the end of April that it did not have enough money to service a £180m bond which is due to be repaid with interest today.
On Saturday, the Daily Telegraph reported that City traders were expecting the company to go into administration this week if last-minute negotiations with the lenders collapsed.
But in a statement released this morning, INM said it had reached an agreement with 91 per cent of the bondholders for a “standstill period” from today until 26 June.
During the six-week period, none of the bondholders can take the company to court asking for the money to be repaid, and interest payments are suspended.
INM said it had also raised an extra £13m in cash from its banks to see it through the next six weeks.
This injection of money is secured against some of the company’s assets and will be repaid when these are sold – but INM did not say what the assets were.
According to Telegraph, some of the company’s lenders have tried to pressurise INM into selling the loss-making Independent titles to raise money.
The Independent’s circulation in April was down 16 per cent year on year at 204,429. The Independent on Sunday fell 26.8 per cent in the same period to 165,040.
INM’s share price has fallen by 85 per cent in the past year. The company’s market value currently stands at £231m. It has £1.2bn in debt.