ITV Declines To Take Up Rights In SMG Fund Drive

ITV has confirmed that it will not take up its rights in SMG’s fund raising drive.
SMG is planning to raise more than £95 million through a rights issue which closes this morning to cut debt and avoid a cut-price sale of its Virgin Radio station.
However, ITV which owns just under 17% of SMG, said that shares in the smaller company are now just 15.25p
The shares have now slipped back from their level before the rights issue announcement.
According to financial experts, ITV would have needed to lay out about £15 million to take up its rights.
The decision comes at a time when ITV is focused on revamping the business as well as cost cutting to deliver £40m of savings by 2008.
SMG chief executive Rob Woodward hopes the fund raising will help to cut its debt from about £170m to £40m, leaving it able to deal better with strong advertising markets.
(DS)