ITV attempted to move beyond its calamitous search for a new chairman and chief executive yesterday with a £135 million bond issue.
A day after Sir Michael Bishop, the former boss of UK airline BMI, pulled out of the running to chair ITV, the troubled broadcaster said it was issuing bonds to strengthen its balance sheet and extend its debt maturity.
It also announced it would
retain SDN, its digital terrestrial channel operator, which was put up for sale in April.
Interim chief executive John Cresswell, who will leave when a replacement is found, refused to discuss the group's executive search, but said yesterday's announcement showed the current management was "taking decisions, being proactive and just getting on with it".
Shares in ITV rose after it revealed October advertising revenues were expected to be about 3 per cent below the same month last year, a big improvement on the 15 per cent fall in the first half. Analysts at Numis Securities said the figure was stronger than anticipated, meaning pre-tax profits could be £20m higher than forecast.
ITV also moved to plug a hole in its pension scheme, trying to use SDN as a backing asset against the deficit. The group is in talks with the scheme's trustees about a deal, under which ownership of SDN would be transferred to the scheme if the deficit, valued at £538m in June, is not eliminated.
Numis welcomed the retention, saying it had long regarded SDN as "a hidden gem" within the broadcaster's portfolio.
Buyers had been found for the bonds, which mature in 2016, by 2pm yesterday. The issue came with an assurance that ITV has no plans to raise cash. However, analysts expect a new executive team to tap the markets further down the line.
Holders will be able to convert the new bonds into ITV shares if they reach 70.44p, a premium of about 39 per cent to last night's closing price of 50.55p, a 6.8 per cent rise on the day.
