GWR is selling its 25% stake in DMG Radio Australia to Daily Mail and General Trust (DMGT), holder of the remaining 75%, in return for a cancellation of debt to the company.
As part of the deal, 5.8 million new shares in GWR will be issued to DMGT, raising its stake in GWR from 26.8% to 29.9%. The share issue, along with the transfer of DMG Radio Australia, effectively writes off £47 million of debt owed by GWR to DMGT.
The transaction values DMG Radio Australia at around £35.0 million. For the year ended 31 March 2002, the business recorded sales of A$73.3 million (£25.5 million) and operating losses of A$7.5 million.
Commenting on the transaction, Ralph Bernard, executive chairman of GWR, said: “We had previously announced our intention to dispose of our interest in Radio Australia and I am pleased that we have been able to agree satisfactory terms for this. This transaction reduces significantly GWR’s debt level and enables us to focus our attention on opportunities in the UK market.”
