The Interpublic Group currently relies on a $500 million one-year revolving credit facility, used to guarantee short-term funding. This expires on 15 May. Conditions of its renegotiated agreement stress that Interpublic must raise the $400 million by that date for the rolling facility to continue.
If Interpublic fails to meet this condition it will be forced into an expensive short-term $500 million loan facility from UBS Warburg. It is hoping that the sale of its market research business, NFO Worldwide Group, will avert this scenario. Aegis is being seen as a potential bidder for the business.
Interpublic's need to raise funds from asset sales follows heavy borrowing last year that exceeded shareholder funds by 5 per cent, according to the industry newsletter Marketing Services Financial Intelligence. This high borrowing was coupled with a $246 million deficiency in the assets of the group.
Last week Interpublic replaced John Dooner as its chairman and chief executive with David Bell.
- News, p5.