SMG clinches £193m loan deal with banks

A FINANCIAL breathing space has been given to SMG ahead of its annual results due tomorrow, with the news that a banking syndicate led by Royal Bank of Scotland had extended its loan facilities to the Scottish media group.

SMG, owner of Virgin Radio and STV, announced that the syndicate had agreed to new banking facilities through to the end of September 2008.

In October, the Glasgow-based company said it was in discussions with its banks in relation to a potential breach of certain financial covenants.

SMG said it had finalised negotiations on an amended banking facility of 193 million.

The new arrangements include an increase in interest margin of 0.75 per cent.

The new facility comes just over a month after the appointment of Rob Woodward as chief executive of SMG following a mass boardroom clear-out at Pacific Quay.

Woodward, the former commercial director of Channel Four, will outline his initial thoughts about the company's prospects at SMG's full-year results.

The latter are expected to show pre-tax profits of 10.8m for SMG during 2006, nearly halved from 20m in 2005.

Like other media businesses, SMG has faced a depressed TV and radio advertising market, but its situation has been exacerbated by takeover distractions.

In February, its chairman Chris Masters and five non-executive directors quit following a shareholder revolt over their plans to merge the business with Ulster TV, owner of TalkSport.