Sanctuary to raise £10.7m for heavy metal Net site

THE SANCTUARY Group, the media company that manages music groups such as the Pet Shop Boys and Iron Maiden, said yesterday it would raise £10.7m from a share placing to finance a potential acquisition, repay debt and launch an Internet site devoted to heavy metal.

THE SANCTUARY Group, the media company that manages music groups such as the Pet Shop Boys and Iron Maiden, said yesterday it would raise £10.7m from a share placing to finance a potential acquisition, repay debt and launch an Internet site devoted to heavy metal.

Mike Miller, Sanctuary's finance director, said heavy metal was enjoying an upsurge in popularity. Sanctuary expects the website, to be launched early next year, to break even in its second year of operation. The company has already set up a successful site dedicated to Iron Maiden. The new portal, in which the group plans to invest £500,000, will feature daily news, chatrooms and bulletin boards.

Sanctuary will also spend around £3m on the planned acquisition of an unnamed record label. The company said that if its negotiations to buy the record group fall through, it will use the money to pursue other corporate opportunities. The rest of the proceeds from the placing will be used to repay about £2.5m in short-term borrowings, to reduce the group's overdraft and to redeem £450,000 of loan notes which formed part of the consideration for the company's acquisition of the Ted D Bear audio and video facilities group.

Among Sanctuary's other interests and divisions are a joint venture that produces family television dramas such as "Enid Blyton Adventures" and "Swiss Family Robinson," an agency that organises live tours for artists such as Robbie Williams, Texas and Blur, a record production unit and a book publishing arm.

Under the placing, 43.7 million shares in Sanctuary will be sold at 24.5p.

The company expects that net proceeds from the offering will be £10m and pre-tax profits for the year to 30 September will be £2.5m, compared with £1.5m for nine months last year.

Sanctuary shares closed down 0.75p at 26p.