Independent News & Media (IN&M), the embattled owner of The Independent newspaper, is considering plans to hold a rights issue to help to raise about €100 million (£84.5 million) to repay money owing on a bond.

The newspaper publisher, which is racing to meet a Friday deadline to refinance debt, is trying to put together a package to give bondholders half the €200 million they are owed in cash now. It hopes to pay off the rest later.

The rights issue plan involves raising €50 million to €75 million from the rights issue directly, with Sir Anthony O’Reilly and Denis O’Brien, its two largest shareholders, contributing something in proportion to their near-60 per cent combined stake. Bondholders will also be offered about 15 per cent of the proceeds from asset disposals, including stakes in Verivox, a price comparison service, and Caschade, an online gambling concern. These are expected to total around €150 million and provide an extra €20 million to €25 million, taking the total close to €100 million.

The remaining €100 million of debt due would then be converted into a new bond, with its eventual repayment delayed for several years, in the hope that IN&M’s finances would have improved by then.

A previous proposal that would have given bondholders €30 million cash from the two Irishmen and 10 per cent of disposal proceeds, was rejected, leaving IN&M’s board scrambling to develop a new plan as the deadline looms. A brief formal announcement that a cash call is under consideration coould come today.

Bondholders are at risk of receiving nothing in the event of a collapse of the company as their €200 million ranks behind the publisher’s other €1.2 billion of debt. However, that has not dissuaded them from trying to get better terms, knowing that Sir Anthony would not want to see a publisher he has controlled since 1973 collapse.

They also hope that Denis O’Brien, who controls the Digicel mobile phone business in the Caribbean, will stump up more of his money to improve the terms on offer. Mr O’Brien has become increasingly vocal in demanding that the talks conclude this week in an effort to reach a conclusion. It would be theoretically possible to extend negotiations beyond Friday’s deadline if all the parties involved were to agree.

Talks over a possible sale of The Independent to Alexander Lebedev continue, but those discussions are not relevant to the bond repayment, because the London titles will not raise a material sum if sold.

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