ITV cannot borrow cash

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ITV, the UK’s main commercial broadcaster, has seen its share price collapse to such a low level as to make it near-impossible to borrow money. Friday night’s closing price was 42.6p (up 3p during the day) but having fallen by 50% since January. The anxiety now is that ITV’s shares will shortly be downgraded to “junk” status.

Indeed, the position is so bad that a £110m bond just issued carried the name Carlton Communications, such is the status of ITV. Carlton was one of the companies (with Granada) which merged to create ITV and is now a subsidiary of ITV. Yet it was able to command better interest rate terms than the parent company!

The City’s financial consensus is that Michael Grade, ITV’s executive chairman, is not likely to survive much longer. Advertising is being squeezed by the economic downturn in the UK, and the hoped for ratings revival that Grade promised hasn’t happened. One analyst (Lorna Tilbian from Numis) said Grade promised to put the showbusiness back into ITV. “But unfortunately it looks like too much show and not enough business.”



Source: RapidTVNews

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