SMG shores up its finances with £90m HBOS loan

Published on Saturday 1 December 2007 01:19

DEBT-LADEN broadcaster SMG moved closer to overhauling its finances yesterday, unveiling a new five-year £90 million loan facility with HBOS.

SMG, which is currently looking to sell Virgin Radio, said in a statement that it expected an already-announced 95 million rights issue, scheduled for 18 December, to repay all of its existing debt.

Once that is complete, it said, the loan agreed with HBOS would represent the entirety of its borrowings.

The group is looking to sell Virgin Radio so it can concentrate on its television businesses, including STV in Scotland and Ginger Productions.

Appetite for a float or trade sale of Virgin has waned in tighter credit markets, but SMG hopes the rights issue and new loan arrangements will allow it to sell the station from "a position of strength".

The firm postponed the sale of the station in September after offers reportedly came in below its 80m target price.