Independent News & Media has withdrawn from the burgeoning Indian newspaper market by selling its remaining stake in Jagran Prakashan Ltd for â‚¬32m (£26.5m) to help reduce company debt.
The Irish newspaper business reported today that it sold the final tranche of its holding in JPL, owner of Indian daily Dainik Jagran, on the Bombay and National Stock Exchanges.
The sale of its 17.1m ordinary shares – 5.7 per cent of the issued capital of JPL – marks the end of INM’s piecemeal disposal of its holding in the company.
INM, which owns newspapers in Ireland, Northern Ireland, South Africa and Australasia, was one of the first international media businesses to invest in the growing Indian market when it paid â‚¬28.5m (£23.6m) to acquire more than a quarter of JPL in 2005.
The company said today that it had received proceeds totalling â‚¬96m (£79.6m) as a result selling its JPL shares over the past 14 months.
Gavin O’Reilly, INM chief executive, said: “While we have been crystal clear that our immediate and continuing priorities are on reducing bank debt, achieving and sustaining leverage ratios at significantly lower levels, and focusing on growing our market-leading brands in our core markets, it is fitting to recognise that our five year investment in JPL has been a highly profitable one for INM.”
O’Reilly, who will remain as a non-executive director of JPL, said INM remained open to investing in the Indian media market in the future.
“On behalf of INM, I am honoured to have been asked to continue to serve as a director of JPL, and at the appropriate time, we shall continue to work with JPL and the Gupta family in exploring other ventures in what is undoubtedly one of the most exciting media markets in the world,” he added.
Earlier this year, INM reported pre-tax losses of â‚¬31m (£27.4m) for 2009 as it wrote-down the value of its assets by â‚¬95.4m (£78.4m). The company’s debt stood at â‚¬1bn (£829.5m) at the end of last year.
INM then proceeded to sell the London-based Independent and Independent on Sunday newspapers in March to Russian billionaire Alexander Lebedev for a nominal £1.
INM agreed to pay Lebedev’s new company, Independent Print Ltd, the sum of £9.3m over 10 months to take on the future liabilities of the loss-making London newspapers.