SMG to write off up to £100m against radio acquisitions

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Claire Billings,

March 18, 2002

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SMG to write off up to £100m against <BR>radio acquisitions

LONDON - Scottish Media Group is set to write off as much as £100m against acquisitions, such as Virgin Radio and Scottish Radio Holdings, in an attempt to satisfy auditors helping it restructure its £390m debt mountain.

The company is expected to announce a write-down of between £60m and £100m when it reports its full-year results this week. The decision follows Friday's announcement that the company has reached agreement with creditors to extend funding arrangements until June 2003.

Until this announcement, reports had suggested that the only way forward for the company would be to break it up, which might have seen it sell its ITV franchises Grampian and Scottish Television, in which Granada is a shareholder.

SMG chief executive Andrew Flanagan has been heavily criticised for the company's stake in SRH. SMG now has owns 29.45% of SRH, which it paid £147m for and which the write-off is believed to relate to. This followed the £225m acquisition in 2000 of Ginger Media Group, which includes Virgin Radio, from high-profile DJ Chris Evans.

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