THE letter from Denis O'Brien seeking an extraordinary general meeting of Independent News & Media (INM) has been issued to the media this weekend.

In the letter, O'Brien, who owns 26% of the Irish-based media group, says that "no coherent plan has been developed by the management... to put together an equity story and build a successful media company".

O'Brien claims that the "leadership of the current board does not have the credibility with the company's shareholders or the public market that is required for the company to raise the new equity needed to create a new capital structure". He also claimed it was "clear that the seven remaining O'Reilly legacy directors have been party to a whole series of bad decisions and have failed all stakeholders".

Responding, chief executive of INM Gavin O'Reilly said the matters facing the company were "very serious and this is a time for serious behaviour, not what appears to be a personal vendetta that is directly impacting stakeholder value. If Mr O'Brien has a constructive proposal to put to shareholders, let's hear it before asking shareholders to abandon an agreed road map to financial stability. Conversely, if Mr O'Brien's aim is to wrestle control of this company for his own benefit, then he should avoid the back door and make a transparent bid for the company."

The letter from O'Brien expresses opposition to the conditional agreement to dispose of the INM Outdoor business. "It is self-evident that while disposing of this business will reduce total debt, given the current leverage ratio at the company, it is not a de-leveraging transaction. In the fullness of time, I believe that the disposal of this business will be seen to be a bad decision."

However INM argues that it was following board approval that it entered into a "contractually binding 'sale and purchase' agreement (subject to shareholder approval) to dispose of INM Outdoor", adding: "This has been a key part of the group's de-leveraging programme since the beginning of this year. In addition, it is central to the current refinancing discussions and our banks have confirmed that they consider it key to any resolution."

O'Brien also says in the letter that "immediate action" should be taken to dispose of or close the operation of the two titles of the London Independent on the grounds it is "losing almost €75/€80,000 per day in cash terms". In res­ponse, INM argued "the immediate closure of these titles would carry significant guaranteed contractual costs" for the plc and the group's focus has been on eliminating losses. Progress in this regard was outlined as part of the group's interim results published recently, it added.

O'Brien says that his three appointees to the board of INM have had their efforts "constantly thwarted and obstructed at every turn by the existing management and board members", adding: "Any effort to revitalise and bring about change in this company has been met with at least suspicion and at the most, outright resistance."

He further wrote that "now is the time for change, now is the time for hard decisions. It is critical that radical changes are made to the board in an effort to salvage what was once and what can be again a successful media company. And for the first time, they now have a choice. This company cannot afford to keep doing what it has done for years. It needs change."

However, INM has said that the board's priority has been to progress, "in a timely and orderly fashion, towards a final and lasting resolution of the group's financial restructuring for the benefit of all stakeholders".

It said that a number of resolutions proposed by O'Brien for consideration at an egm "are at variance with decisions previously taken by the board of INM. It is difficult to see how Mr O'Brien's actions assist in the resolution of the financial restructuring, which the board believes is in the best interests of the company and its stakeholders."

INM is a 29.9% shareholder in the Sunday Tribune.