The billionaire Denis O’Brien was forced to pump an extra €7.8m into his Communicorp radio empire during 2015 to fund ongoing losses and meet the cost of a UK acquisition, according to accounts seen by The Sunday Times.
The additional loans brings O’Brien’s total investment in the radio group to €153m.
The Sunday Times has also learnt the radio group has in recent weeks agreed a reorganisation of its borrowings with Ulster Bank, its main lender.
Communicorp was recently linked to a possible sale of its Newstalk station to Independent News & Media, the newspaper publisher that is 29% owned by O’Brien.
It was reported that INM chief executive Robert Pitt and chairman Leslie Buckley clashed over differing valuations of the radio station. The valuations were submitted by Davy and IBI Corporate Finance, advisers to INM and Communicorp respectively.
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It is understood the variance in prices was substantial and led to tensions between the two most senior figures at INM. Talks on the Newstalk takeover did not progress.
The Communicorp balance sheet is still carrying the strain of the boom-time purchase of Today FM and FM104 in 2007 for €200m.
Its operating profits are roughly half its annual interest bill of €4.2m.
Borrowings stood at €62m at the end of 2015, down €6m on the previous year.
Some €21.1m of the group borrowings were current, or payable within one year, at the end of last year.
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The terms of the debt reorganisation, flagged in company filings, were not revealed, though it is likely to have involved a rescheduling of repayments.
Borrowing peaked at €103m in 2010, when Communicorp owned a total of 42 stations across Europe. A disposal programme has contributed to a fall in group borrowings.
The group sold its interests in Latvia in September 2015, booking a gain of €1.4m.
Communicorp claims to be the largest commercial radio operator in both the Irish and Bulgarian markets, and the No 4 player in Britain.
Apart from Newstalk, it owns Today FM, 98FM and Spin.
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Accounts show that the group incurred losses of €3.4m in 2015, despite a big jump in sales. The losses were marginally higher than 2014.
The company said that the profitability of the group was “negatively impacted” by greater investment in marketing and programming to increase audiences.
Turnover for the year was €85.6m, up almost 29%. Sales at its European businesses were up 40%, partly as a result of a full 12-month contribution from eight UK radio stations acquired in 2014.
Sales in Ireland were up 10% due to “improved trading conditions”.
The UK radio stations were purchased from Global Radio, and include Capital Scotland, Capital South Wales, Real Radio XS Manchester, Real Radio North Wales, Real Radio Yorkshire, Smooth East Midlands, Smooth North East and Smooth North West.
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At the time of the transaction, in February 2014, it was stated that Communicorp paid up to £35m for the stations.
However, the Communicorp accounts reveal that the price paid was far lower.
The total consideration for the eight stations was €8m, and just €4.8m was paid up front.
Deferred consideration of €3.2m remained outstanding at the end of 2015.