The stand-off between Independent News & Media, its banks and bondholders could end messily. IN&M cannot raise new debt to fund a €200m, 5.75 per cent bond maturing on May 18. In spite of twice delaying its results, IN&M on Thursday filed accounts in which PwC, its own auditors, raised doubts over the Irish group’s ability to continue as a going concern. It will be a miracle if the group doesn’t fail next month’s net debt to earnings before interest, tax, depreciation and amortisation covenant test. The trigger is not public, but ebitda, down 56 per cent to €331m last year, will fall again in 2009 to between €200m-€240m, IN&M warned on Thursday. With €1.3bn of net debt, the ratio could hit 6.5. Bad though this is, the Independent’s owner could yet make it.

All parties have an incentive to reach a deal. The O’Reilly owner-manager family and “dissident shareholder” Denis O’Brien, who together own a majority of the shares, may hate to throw good money after bad, but after so much bickering would suffer a big loss of face if IN&M failed. Debt-holders, too, would recoup little from the administrators: IN&M’s bank debt of about €650m is secured by UK and Irish assets, but the €456m in 39 per cent-owned Australian subsidiary APN is non-recourse.