SMG unveils debt-cutting plan

Debt-laden broadcasting group SMG turned to investors today in a bid to help it avoid a cut-price sell-off of its Virgin Radio station business.

SMG, which operates STV in Scotland and production businesses such as Ginger Productions, said a £95.1m (€137m) rights issue would reduce its debt burden to around £40m (€57m) and lower the company’s interest charges.

The issue of new shares also staves off the pressure for an immediate sale of Virgin Radio, as the group shifts focus to its television business.

Appetite for a float or trade sale of the station had waned in tighter credit markets, but SMG said the cash would allow it sell Virgin from “a position of strength”.