JazzFM deal with CCI raises pounds 3.6m

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The Independent Online
GOLDEN ROSE, the owner of JazzFM, has linked up with US media company Clear Channel International (CCI) in a deal that will give CCI a 33 per cent stake in the fledgling commercial radio company and raise up to pounds 3.6m net of expenses to pay off debts, writes Clifford German.

It will also cut Golden Rose's sales and marketing costs by up to pounds 1.5m a year, enough to put the company into the black. Golden Rose announced yesterday a pre-tax loss of pounds 1.5m in the year to 30 September, up from pounds 1m in the previous year.

The cash will also help expand Golden Rose's record label, which accounts for a fifth of current activities. It will enable it to move from compilation records into recording original artists, and fund applications for up to eight more UK jazz radio channels which are due to be allocated over the next two years.

Golden Rose is offering 8m new shares at 50p each, of which CCI will take up 6m giving it 27 per cent of the increased equity. The remainder will be offered to existing shareholders and will be underwritten by CCI, raising its stake without triggering a requirement to bid.

Golden Rose's advertising sales force will move into CCI's advertising subsidiary More Group, which will take over all sales and promotion costs. The shares rose 1.5p to 57p.