Digital TV company could raise $290 million

LONDON — Cash-strapped U.K. terrestrial giant ITV may sell digital TV channel operator SDN as it weighs up possible options for disposals.

The flailing web, whose stock price fell to a new low of 22.5p ($0.33) Monday, could raise as much as £200 million ($290 million) from the sale of SDN, acquired in April 2005 for around £140 million ($204 million).

ITV is now capitalized at under £1 billion ($1.45 billion), something that would have been unthinkable even six months ago. Ten days ago the broadcaster was worth £1.3 billion ($1.9 billion).

Extra coin is needed because of a plunge in the ad market, the need to service its debt and tackle a pension fund deficit that could be as much as £300 million ($437 million).

SDN rents capacity on U.K. digital terrestrial platform, Freeview, to webs including Five and shopping channel QVC.

The business is profitable and brought in revenues of £36 million ($52 million) in 2007, up 44% on the previous year, but it is not regarded as key to ITV’s main activities as a broadcaster producer.

As the downturn exacerbates ITV’s troubles, pressure is mounting on executive chairman Michael Grade to raise coin prior to the publication of annual results due March 4.

Another option under consideration is the sale of website Friends Reunited but on its own this would not raise enough coin.

ITV staff are braced for another round of pink slipping and there is speculation that the once ring-fenced annual £1 billion ($1.45 billion) program budget will be cut by 5%.

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