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Mecom secures another covenant test extension

I have a feeling Mecom-boss David Montgomery will have a very interesting visit to Norway next week.

After selling off its operations in North-Western Norway, the pan-European newspaper group today announced it had won a further reprieve from its lenders and now has until the end of March to get its finances back within agreed limits.

I can't imagine union reps, some of whom were rather hoping the troubled media company would sell all its Norwegian newspapers to the national newspaper group A-pressen, will take to well to the news of yet another month of uncertainty. Nor does it bode too well for Mecom's share price, down 16 per cent at the time of writing, at least in the short term.

For more thoughts on the shareprice, check this bit of analysis - it concludes that only two events would propel the SP any higher from here: (1) Further sale of assets (Polish assets are next in line, but timescale is uncertain, and (2) A covenant pass at the end of the 'extension' period - which rings true to my ears (latter via Searcher, no link available).

But, back to Montgomery's scheduled visit to Norway next week: it's a good thing he has become so used to taking abuse from Mecom journalists these last few years.

Talking to the Norwegian Journalist Union's annual convention in April 2007, he was told "I have to warn you this is a very hostile crowd, and they have been drinking 'til 4am, so this is a pretty mean bunch... Now, Norwegian journalists think you're a ruthless stranger who just rode into town to upset all that has been built over the last 60 years. How do you feel about that?"

"In the round of my career I've created more jobs than what I've destroyed," he answered then. However, I'm sure he'll be met with plenty of questions in a similar vein next week, and even though the audience will probably not have been drinking til 4am, I doubt it will be any less hostile.

(For the record: I covered this debate as a journalist, though I'd much rather have (live) blogged it, as I did with this debate, and the quotes here are previously unused ones from my private transcripts)


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