Granada expects pounds 70m from BSkyB refinancing: Debt repayment due by end of summer

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The Independent Online
GRANADA GROUP expects to receive up to pounds 70m in debt repayments by the end of the summer as its share of the refinancing of BSkyB, the satellite broadcaster in which it has a 13.5 per cent stake.

Gerry Robinson, Granada's chief executive, said yesterday that he was confident the refinancing would be complete well before the end of the year.

Negotiations are under way to refinance around half the pounds 1bn of debt BSkyB owes to its shareholders and to simplify its complicated debt structure.

Mr Robinson said there would be no difficulty in replacing the debt with non-recourse bank finance as BSkyB was now generating sufficient profits to cover the interest.

'We would expect to get pounds 60m to pounds 70m out of the restructuring,' he said. The company would then probably float in 1995-96.

Granada was looking to dispose of its stake, he added. This could be to one of the other shareholders or as part of the flotation.

Pearson, with 17.5 per cent, is known to want to increase its holding in an attempt to improve its negotiating position with Rupert Murdoch's News Corporation, which owns more than half BSkyB's equity. Chargeurs, the French group, owns the remainder.

Analysts' estimates of BSkyB's value on flotation range from pounds 4bn to pounds 6bn, which would put Granada's stake at upwards of pounds 500m. That is the equivalent of about a fifth of Granada's capitalisation.

The pounds 70m of debt repayment would also dwarf the pounds 45m in pre- tax profits expected to be generated this year by LWT, the London weekend broadcaster. Granada is paying pounds 765m in cash and shares for LWT following a hard-fought bid battle, which culminated on Friday in the conglomerate's victory.

Sir Christopher Bland, LWT's chairman, met Mr Robinson yesterday but did not hand in his resignation as expected.

Mr Robinson said that it had been agreed from the outset that there would be no place for Sir Christopher if the bid succeeded, but he would be staying on for a few weeks to ease the transition.

'We are going to take things slowly,' Mr Robinson said. 'We met Christopher this morning and we are going to work things out over the next few weeks.'

The right recipe, page 31

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