(CelebrityAccess MediaWire) – Sactuary Group issued a statement to the London Stock Exchange today, confirming that it is likely to require additional funding “in the near term” as it is near closing in on the sale of its music publishing and studio businesses.
Sanctuary executives said in the statement that the new measures are intended to help stabilize the debt-laden firm.
“The board recognizes that the level of debt in the group is too high and is actively exploring a number of options for the medium and long term financing of the group,” the statement read, according to Billboard.biz.
The statement said the company is also in “active discussions” regarding the disposal of its music publishing and studios businesses, once key aspects of its 360-degree business model.
The independent London-based group has issued a string of profits warnings recently, and is now expecting to post a pre-tax loss for the full year. The statement today said the charges would come in the form of “substantial” provisions and write-downs that would hit this year’s annual results.
Although its full figures are still being audited, Sanctuary said the provisions and write-downs were “likely to be in the region of £130 million ($224 million) to £170 million" ($294 million), according to Billboard.biz. Sanctuary's full-year financial report is due Jan. 27, 2006.
“We continue to look around at deals,” Sanctuary co-founder Andy Taylor told the magazine. “It's not our intention to sell the major chunks of our business. It's our intention to build on those. We're just tidying it all back to the roots, but the base of what we built remains strong.”
Sanctuary has reportedly hired Evolution Securities to explore a “significant” equity fundraising. Billboard.biz said that unconfirmed reports suggest the company is seeking roughly £100 million ($173 million), with the intention of reducing some of its £120 million ($270 million) debt pile.
The company has redefined its once all-encompassing entertainment business as focused on recorded product, merchandising, artist management and live agency activities.
“We have progressed quickly and efficiently since the late summer and I am confident that the Board's response to the current situation has been the right one and one that will set Sanctuary on course for future success,” Taylor said in the statement, according to Billboard.biz. –by CelebrityAccess Staff Writers