STV welcomes ‘flexibility’ as it extends £70m lending agreement

Published on Saturday 21 January 2012 02:03

BROADCASTER STV Group has extended its £70 million loan and overdraft with its bankers.

The new facilities include £37.5m in term loans and £32.5m in revolving credit with Bank of Scotland, Barclays Corporate and Santander. It will cost the firm an extra £1m in higher charges, reflecting “current market conditions”, but added that the group’s key financial covenants remained unchanged.

The agreement extends STV’s banking headroom by at least two years from the December 2012 expiry date on its existing facility. That could be further stretched to March 2016 if the group renews its two ITV broadcasting licences for Scotland – which currently run through to the end of 2014 – before the close of 2013.

Finance director George Watt said: “These new facilities will provide the group with certainty and flexibility to continue to pursue our growth ambitions.”

Analyst Patrick Yau at Peel Hunt said the extra interest charge would trim STV’s earnings by 3 per cent in the coming year. However, Paul Richards at Numis Securities said this was typical of agreements currently being struck, adding that it was a “very sensible move” by STV.

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