Commercial radio group GWR has announced the sale of its stake in Radio Investments (RIL) to a new company headed by former Jazz FM chief executive, Richard Wheatly, for a total of £10.6 million.
The disposal of the 27.8% stake is due for completion later this month once Wheatly’s fledgling Local Radio Company has completed its accelerated flotation on the alternative AIM index.
The acquisition will see the radio start-up take control of the twenty-two local stations currently owned by Radio Investments Limited. RIL recorded net assets of £20.8 million as of September 2003 with losses before tax, amortisation and impairment coming in at less than £1 million.
GWR says the sale is in-line with its ongoing strategy of disposing of non-core assets to reduce group debt from £65 million in the year to 31 March to £55 million. The sale will realise an exceptional profit on completion of around £4 million.
It is understood that Wheatly will be joined by a number of other former Jazz FM executives in the Local Radio Company venture. These include the station’s former finance director Alistair Mackenzie and ex-entertainment director Simon Cooke.
Wheatly was widely credited as the man responsible for turning around the fortunes of Jazz FM. His early career in advertising and marketing helped him to develop the station as a brand, with its own CDs and concert organisation. However, such spin-offs could be more difficult to achieve in local radio (see Former Jazz FM Boss To Front Radio Investments Buy-Out).
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