LONDON — Indie music company the Sanctuary Group is pressing ahead with a £110 million ($195 million) rescue package following confirmation that losses hit $252.9 million in the year ended Sept. 20, up from $47.2 million a year earlier.
Sanctuary plans to raise the coin via a cut-price shares issue in a move that will dilute the value of its existing shares. It also has agreed to a deal with its major lender to cancel $62 million of its debt.
The losses were mostly caused by problems at its now-defunct Urban Records division, which was run by Mathew Knowles, father of pop star Beyonce.
“The past 12 months have been the most difficult and challenging period that Sanctuary has ever had,” said executive chairman Andy Taylor. “Despite that, we are looking to the future with confidence. It is worth remembering that we have built Sanctuary’s business up over 30 years and I am confident that we have a business, presence and support throughout the music industry that will help us to emerge successfully from this restructuring.”
Sanctuary describes itself as the world’s “only 360-degree international music group” encompassing publishing, record labels, merchandising, music management, DVDs and live events.
Its stable of artists includes Elton John, the Manic Street Preachers, Morrissey, Beyonce and Destiny’s Child.
At its peak two years ago, the company was valued at more than $353 million. In early trading Monday, Sanctuary shares fell 4.8%, valuing the group at $7 million.
The company shed 175 jobs, a quarter of its workforce, in October.