BSkyB to repay pounds 400m of debt to its shareholders

BSkyB is to repay pounds 400m of debt owed to News Corporation, Pearson, Chargeurs and Granada, writes Gail Counsell.

The satellite company, whose financial fortunes have been transformed by its successful transition to subscription-only broadcasting, has refinanced pounds 500m of its pounds 1.6bn of outstanding shareholder debt.

Rupert Murdoch's News Corporation, which owns just over 50 per cent of BSkyB, will get about pounds 175m. The media conglomerate Pearson, and the French group Chargeurs, which each hold 17.5 per cent, will receive pounds 81m apiece, while Granada, the television and rental group which has a 13.5 per cent stake, will be repaid pounds 61m.

A further pounds 100m will be used to repay an outstanding bank loan guaranteed by the shareholders.

The refinancing has been organised through a five-year pounds 500m credit facility with the Toronto-Dominion Bank and Citibank NA.

The repayments cover several elements of BSkyB's complex debt structure. Broadly they cover pounds 106m of 'D' loan stock interest and principal - all that remains of this debt following last December's partial pounds 100m repayment - plus pounds 167m of maiden dividend and pounds 127m of loan stock interest and principal.

Richard Brooke, BSkyB's chief financial officer, said the refinancing would have been impossible to arrange a year or two ago.

BSkyB made pre-interest profits of pounds 85m in the six months to end December. In the full financial year it is expected to make pre-interest profits of about pounds 160m.

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