Stock price falls 15% after announcement
Scottish Media Group, whose assets include two U.K. TV stations and production businesses, is raising £95.1 million ($190.2 million) from investors to reduce debt and invest in core activities.
The company’s stock price fell by more than 15% on Tuesday’s announcement, which will see 634 million new shares issued.
The coin raised by the shares issued will be used to “facilitate future investment” in SMG’s TV activities, which include the two ITV licenses, SMG Prods. and Ginger Prods.
The company aims to reduce debt by around $200 million.
In a statement, SMG’s CEO, Rob Woodward, said: “The board of SMG believes that the (share) issue is an important step in the transformation of the group’s balance sheet.
“It will significantly reduce debt, substantially decrease interest payments, allow flexibility in timing of disposals and ensure that we can now focus fully on achieving our broadcasting key performance indicators.”
Woodward added that despite difficult market conditions, SMG was on track to deliver substantial cost savings and was well placed to maximize opportunities.