01.09.02
Treasury
agrees borrowing limit for أغر؟´«أ½'s commercial subsidiaries
The
Treasury has agreed a borrowing limit of آ£350 million for
the أغر؟´«أ½'s commercial subsidiaries, أغر؟´«أ½ Ventures Group (encompassing
أغر؟´«أ½ Resources Ltd, أغر؟´«أ½ Technology Ltd, أغر؟´«أ½ Broadcast Ltd and Kingswood
Warren Ventures Ltd) and أغر؟´«أ½ Worldwide Ltd.
John
Smith, أغر؟´«أ½ Director of Finance, Property and Business Affairs, said:
"This agreement will allow Worldwide and Ventures to invest
in new opportunities for growth and to provide a bigger return for
re-investment in أغر؟´«أ½ programming and services, for the benefit of
the licence fee-payer."
As
part of the agreement with the Treasury the أغر؟´«أ½ has agreed to manage
within a range of covenants designed to ensure safety levels in
all commercial investments.
A
non-trading commercial holding company will be created to hold the
shares in أغر؟´«أ½ Worldwide and أغر؟´«أ½ Ventures Group.
Notes
to Editors
The
أغر؟´«أ½'s commercial subsidiaries exist to exploit أغر؟´«أ½ assets in the
market place to provide a cash-flow return to supplement the income
from the licence fee for re-investment in programmes and services.
The
أغر؟´«أ½'s Fair Trading Commitment ensures there is no cross-subsidy
between public service and commercial activities.
أغر؟´«أ½
Worldwide has a target of quadrupling the cashflow it delivers to
the أغر؟´«أ½ over the 10 years to 2006.
Last
year it delivered آ£106 million on turnover of آ£660 million.
أغر؟´«أ½
Ventures Group expects to record its first profit this year.
This
agreement allows the أغر؟´«أ½'s commercial subsidiaries to borrow up
to آ£350 million from investment sources, not from the Government.
The
covenants attached to the borrowing facility ensure that the debt
cannot exceed three times the subsidiaries' earnings and neither
can it exceed 80 per cent of the value of the commercial group's
assets.
The
أغر؟´«أ½'s public service operation is funded by the licence fee, currently
آ£112 (colour) or آ£37.50 (black & white).
The
أغر؟´«أ½'s public service borrowing limit of آ£200 million is not
affected by the new agreement.
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