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Virgin Radio sold to Indian group Virgin Radio sold to Indian group
(about 1 hour later)
Scottish media company SMG has reached a deal to sell Virgin Radio - for less than a quarter of the amount it bought the station for.Scottish media company SMG has reached a deal to sell Virgin Radio - for less than a quarter of the amount it bought the station for.
SMG has sold Virgin to a group led by the Times of India for £53m. SMG has sold Virgin to a group led by the Times of India (TIML) for £53.2m.
In 2000, it paid £225m for Chris Evans' Ginger Media Group, which included Virgin and a TV production company.In 2000, it paid £225m for Chris Evans' Ginger Media Group, which included Virgin and a TV production company.
SMG plans to use the money to reduce its debts but some of the cash from the sale is expected to be given back to its shareholders.SMG plans to use the money to reduce its debts but some of the cash from the sale is expected to be given back to its shareholders.
The sale also means SMG is now free to concentrate on its TV channel STV, the ITV station in Central and Northern Scotland. The sale means SMG is now free to concentrate on its TV channel STV, the ITV station in Central and Northern Scotland.
Nobody from SMG was immediately available for comment. A statement from SMG said it would pay back £15m to Bank of Scotland as part of its debt agreements, and a further £4m to its pension fund.
Another £1.7m will be retained to give the business "additional headroom and flexibility", the company said.
Now is a great period to be entering the UK market and the opportunity to acquire a valuable radio asset couldn't have come at a better time AP ParigiTIML SMG said details of the proposed return of cash to shareholders would be announced in due course.
The buyers of Virgin will have to find a new name for the station.
It will cost them an extra £8m if they decide to licence that brand name within the next two years.
SMG chief executive Rob Woodward said he thought it was a "good deal" for SMG shareholders.
He said: "The disposal of Virgin Radio is consistent with our overall strategy and the proceeds of the sale will allow us to return cash to shareholders, as well as further strengthen an already healthy balance sheet."
Mr Woodward went on to say that SMG was now "fully focused" on its Scottish-based broadcasting businesses.
TIML chief executive AP Parigi said his company had a "proven track record of building powerhouse brands".
He said: "Now is a great period to be entering the UK market and the opportunity to acquire a valuable radio asset couldn't have come at a better time."