ITV raises £120m as it keeps SDN

13th Oct 2009 07:25

Troubled broadcaster ITV is to raise £120m through an issue of convertible bonds as it reiterated it has no plans for a rights issue. "ITV intends to use the proceeds of the offering to extend its average debt maturity, diversify the company's funding and increase the efficiency of the balance sheet. The board restates that it has no current plans for a rights issue," it said.The broadcaster added it is also no longer considering a sale of digital business SDN and that retaining it offers greater potential value for shareholders. ITV has entered preliminary discussions with the Trustees of the ITV Pension Fund over a partnership arrangement under which SDN would provide asset backing to the pension scheme. That reduce the pension deficit on a funding basis, with ITV continuing to consolidate SDN's revenues and cashflows, it said. On trading, the group, which is looking for both a permanent chairman and chief executive having recently been turned down by Sir Michael Bishop for the chairman's job, also said that rate of decline in UK television advertising has continued to ease across the second half of 2009. ITV Family television advertising revenues are expected to be down around 3% year on year in October 2009. Current forecasts for November suggest a similar level of year on year decline."Whilst we are not yet seeing a recovery in UK television advertising, the trend is improving across the second half and into the fourth quarter," chief operating officer John Cresswell said."Seeking to deploy SDN as asset backing to the pension scheme will help us manage our pension risk, whilst continuing to benefit from the strong cashflows that business delivers. We believe it is the right decision for ITV, maximising value for shareholders," he added.