Virgin Radio sale put on hold as SMG confirms loan
LONDON - Debt-laden Virgin Radio owner SMG has arranged a new five-year £90m loan as the broadcaster moves closer to overhauling its finances.
The Scottish media company confirmed today it had renegotiated its borrowing terms, with a new loan facility from Halifax/Bank Of Scotland.
The refinancing coincides with a rights issue -- expected to raise £95m for the broadcaster by the end of December -- which was approved by shareholders last week.
SMG's improved financial situation will mean the company can afford to wait until credit markets improve before attempting to dispose of national pop/rock station Virgin Radio, in the hope of getting a better sale price.
SMG had attempted to dispose of Virgin Radio earlier this year, but postponed the sale after offers reportedly came in below the target sale price.
The company bought Virgin Radio from Chris Evans in 2000 for £225m, but the station is now valued at less than half that figure.
SMG's cinema advertising division, Pearl & Dean, is also earmarked for disposal. If the disposals are successful, SMG would be left focusing purely on its core television activities, STV and Ginger Productions.
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