Sale Agreement Entered Into for Sale of INM SA

SALE AGREEMENT ENTERED INTO FOR SALE OF

INDEPENDENT NEWS & MEDIA SOUTH AFRICA (INM SA)

Ticker: (Bloomberg) INM.ID/INM.LN and (Reuters) INME.I/INME.L

 5 April, 2013 Dublin/London: Independent News & Media PLC ("INM" and/or the "Company" and/or the "Group") announces that, further to the agreed heads of terms announced on 17 February, 2013, it has now entered into a binding agreement ("Sale Agreement") with Sekunjalo Independent Media Consortium ("Sekunjalo") in respect of the disposal of INM SA ("Disposal") for a gross consideration of R2 billion (approximately €170 million), before expenses and subject to certain adjustments under the terms of the Sale Agreement.

The Disposal is subject to INM bank consent, South African Competition Commission clearance and, owing to its size, is also subject to the approval of INM's shareholders as a class 1 transaction under the Irish and UK Listing Rules. The net proceeds of the Disposal are intended to be applied to repay senior debt. (Further details on INM SA and the Disposal are outlined in Appendix 1 to this Announcement).

Commenting on the Disposal, Vincent Crowley, Group CEO stated:

"I am pleased to announce the agreed sale of INM SA, which is a key step in reducing Group debt and strengthening our balance sheet. The sale will mark the end of a long association with a company and a management team, ably led by Tony Howard, which has been mutually beneficial. I am very confident that, in Sekunjalo, and Dr. Iqbal Surve, the INM SA business will be in good hands and I have no doubt that the company will prosper well in the years ahead.

"The reduction in debt which the Disposal will enable is an essential component to the delivery of an overall sustainable and appropriate capital structure for the Group. INM remains in constructive discussions with our banks in relation to the planned refinancing and will provide a further update in due course."

Further information in relation to the Disposal will be contained in a circular to shareholders convening an extraordinary general meeting at which the resolution necessary for the implementation of the Disposal will be sought.

- ENDS -

Contacts:

Appendix 1

Details of the Disposal

INM SA is the largest English language newspaper publisher in South Africa. It owns 18 major newspaper titles across the three key geographic regions of the country. Under the terms of the Disposal, the Group has conditionally agreed to sell to Sekunjalo the entire issued share capital of INM SA and debt owed by INM SA to the Group to Sekunjalo for gross proceeds of R2 billion (approximately €170* million), before expenses and subject to certain adjustments under the terms of the Sale Agreement. 

The Sale Agreement entered into by the Company with Sekunjalo follows a competitive auction process conducted by the Group's advisers, over a number of months, from which Sekunjalo emerged as the highest bidder. The agreed consideration represents a very satisfactory outcome for the Company.

The net proceeds of the Disposal (other than €10 million which will be paid by the purchasers into an escrow account to be held for a period in respect of any warranty claims) will be used to repay part of the Group's indebtedness. The proposed sale of INM SA is consistent with the Group's deleveraging strategy. The intended application of the net proceeds of the Disposal to repay senior debt will substantially reduce the Group's debt and is an essential component to the delivery of an overall sustainable and appropriate capital structure for the Group.

The Disposal is subject to certain conditions including, INM bank consent, Shareholder approval, the exchange control authorities of the South African Reserve Bank having approved the Disposal and the South African Competition Commission having approved the Disposal. Shareholder approval of the Disposal will be sought at the extraordinary general meeting referred to above.

The operating profit before exceptional items of INM SA for the financial year ended 31 December 2011 was €37.6 million. As at 31 December 2011, INM SA had gross assets of €134.6 million. Individuals who are important to INM SA are Tony Howard, CEO of INM SA, and David Ringrose, CFO of INM SA.

* Using an exchange rate of €1:ZAR11.7995, being the rate prevailing on 4 April, 2013.