Convertible offering and rete

RNS Number : 6554A

ITV PLC

13 October 2009

 



13th October 2009 

NOT FOR DISTRIBUTION DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, CANADA, JAPAN, AUSTRALIA OR IN ANY OTHER JURISDICTION IN WHICH OFFERS OR SALES WOULD BE PROHIBITED BY APPLICABLE LAW

ITV plc announces convertible offering, retention of SDN and update on current trading

ITV plc ("ITV" or the "Issuer") is today announcing a number of initiatives to diversify the company's funding, strengthen its balance sheet and manage its debt profile over the medium term.

Convertible Bond offering

ITV announces that it intends to make an offering of approximately £120 million of senior unsecured convertible bonds due 2016 (the "Bonds"), which will be convertible into fully paid ordinary shares of ITV (the "Ordinary Shares").  The Bonds will be guaranteed (the "Guarantee") by Carlton Communications Limited (the "Guarantor"), a wholly-owned subsidiary of ITV.

The Bonds are expected to carry a coupon of between 4.00-4.75% per annum payable semi-annually in arrear and the conversion price is expected to be set at a premium of between 32-37% to the volume weighted average price of ITV's Ordinary Shares from launch to pricing.  The Bonds will be issued at 100% of their principal amount and, unless previously redeemed, converted or purchased and cancelled, will mature on the seventh anniversary of the issue of the Bonds in 2016. The final terms of the Bonds are expected to be announced today and closing is expected on or about 9 November 2009. 

Neither the Bonds, the Guarantee nor the Ordinary Shares of ITV to be delivered upon conversion of the Bonds have been or will be registered under the US Securities Act of 1933, as amended, and, subject to certain exceptions, such Bonds and Ordinary Shares may not be offered, sold or delivered within the United States or to US persons. In addition, the Bonds are subject to US tax law requirements and, subject to certain exceptions, may not be offered, sold or delivered to United States persons.

Applications will be made for the Convertible Bonds to be admitted to listing on the Official List of the UK Listing Authority and admitted to trading on the Professional Securities Market of the London Stock Exchange plc.

ITV intends to use the proceeds of the offering to extend its average debt maturity, diversify the Company's funding and increase the efficiency of the balance sheet.  The Board restates that it has no current plans for a rights issue. 

Pension fund and SDN

ITV announces that it has entered into preliminary discussions with the Trustees of the ITV Pension Fund over a partnership arrangement under which SDN would provide asset backing to the pension scheme. Such a partnership would reduce the pension deficit on a funding basis, with ITV continuing to consolidate SDN's revenues and cashflows. 

On this basis, the Board believes that retaining SDN offers greater potential value for shareholders and is therefore no longer planning to dispose of the business. SDN continues to trade in line with expectations, with full year revenues expected to exceed £40 million.  

Current trading

The rate of decline in UK television advertising has continued to ease across the second half of 2009. ITV Family television advertising revenues are expected to be down around 3% year on year in October 2009.  Current forecasts for November suggest a similar level of year on year decline. ITV remains on course to outperform the TV advertising market across the second half and the full year.  

John Cresswell, Chief Operating Officer of ITV, said:

"The actions that we are announcing today continue our work over recent months to strengthen the balance sheet, improve our debt maturity profile and proactively manage our pension deficit over the long term."

"With the proceeds of the convertible offering, to date this year we will have raised over £225 million of new borrowing with maturities ranging from 2015 to 2019 and without financial covenants."  

"Seeking to deploy SDN as asset backing to the pension scheme will help us manage our pension risk, whilst continuing to benefit from the strong cashflows that business delivers. We believe it is the right decision for ITV, maximising value for shareholders."   

"Whilst we are not yet seeing a recovery in UK television advertising, the trend is improving across the second half and into the fourth quarter.  We continue to outperform the market and are on track to deliver the substantial cost savings we have set out."

For further information:

ITV plc
Investor Relations
Christy Swords	Director of Investor Relations	Tel: [phone]
Pippa Foulds	Head of Investor Relations	Tel: [phone]
Press queries		Tel: [phone]
Ruth Settle	Director of Corporate Comms	Tel: [phone]
Louise Evans	Head of Corporate Comms	Tel: [phone]
Tulchan Communications Group		Tel: [phone]
Susanna Voyle

Notes

1.	A conference call for analysts and investors will take place from 8.15 am on 13 October 2009; the dial-in number is 0808 238 0673 for UK participants and [phone] for international participants. The conference ID is 35665177.
2.	ITV Family includes ITV1, ITV2, ITV3, ITV4, CITV, M&M, GMTV, GMTV2 and associated time-shifted channels. Forecasts for October and November 2009 are based on current ITV estimates.
3.	Figures presented in this statement are not audited. This announcement contains certain statements that are or may be forward-looking with respect to the financial condition, results or operations and business of ITV. By their nature forward-looking statements involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future. There are a number of factors that could cause actual results and developments to differ materially from those expressed or implied by such forward-looking statements. These factors include, but are not limited to (i) adverse changes to the current outlook for the UK television advertising market, (ii) adverse changes in tax laws or failure to achieve regulatory relaxation, (iii) the risks associated with the introduction of new products and services, (iv) pricing, product and programme initiatives of competitors, including increased competition for programmes, (v) changes in technology or consumer demand, (vi) the termination or delay of key contracts and (vii) fluctuations in exchange rates.

THIS ANNOUNCEMENT DOES NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY ANY OF THE BONDS.

THIS ANNOUNCEMENT IS NOT FOR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES (AS DEFINED IN REGULATION S UNDER THE US SECURITIES ACT OF 1933, AS AMENDED ("REGULATION S"). THIS ANNOUNCEMENT IS NOT AN OFFER TO SELL SECURITIES OR THE SOLICITATION OF ANY OFFER TO BUY SECURITIES, NOR SHALL THERE BE ANY OFFER OF SECURITIES IN ANY JURISDICTION IN WHICH SUCH OFFER OR SALE WOULD BE UNLAWFUL. THE BONDS OR OTHER SECURITIES MENTIONED IN THIS ANNOUNCEMENT HAVE NOT BEEN AND WILL NOT BE REGISTERED IN THE UNITED STATES UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES (AS DEFINED IN REGULATION S) ABSENT REGISTRATION OR EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT. THERE WILL BE NO PUBLIC OFFER OF THE BONDS IN THE UNITED STATES. IN ADDITION, THE BONDS ARE SUBJECT TO U.S. TAX LAW REQUIREMENTS.

IN THE UNITED KINGDOM THIS ANNOUNCEMENT IS DIRECTED AT (I) PERSONS WHO HAVE PROFESSIONAL EXPERIENCE IN MATTERS RELATING TO INVESTMENTS FALLING WITHIN ARTICLE 19(5) OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 (FINANCIAL PROMOTION) ORDER 2005 (THE "ORDER"), (II) HIGH NET WORTH ENTITIES, AND OTHER PERSONS TO WHOM IT MAY OTHERWISE LAWFULLY BE COMMUNICATED FALLING WITHIN ARTICLE 49 OF THE ORDER, AND (III) PERSONS TO WHOM IT MAY OTHERWISE LAWFULLY BE COMMUNICATED (ALL SUCH PERSONS TOGETHER BEING REFERRED TO AS "RELEVANT PERSONS"). THIS ANNOUNCEMENT MUST NOT BE READ, ACTED ON OR RELIED ON BY PERSONS WHO ARE NOT RELEVANT PERSONS. ANY INVESTMENT OR INVESTMENT ACTIVITY TO WHICH THIS ANNOUNCEMENT RELATES IS AVAILABLE ONLY TO RELEVANT PERSONS AND WILL BE ENGAGED IN ONLY WITH RELEVANT PERSONS. BY READING THIS ANNOUNCEMENT, THE READER ACKNOWLEDGES THAT IT IS EITHER (I) OUTSIDE THE UNITED KINGDOM OR (II) A RELEVANT PERSON. 

IN MEMBER STATES OF THE EUROPEAN ECONOMIC AREA ("EEA"), THIS ANNOUNCEMENT AND ANY OFFER IF MADE SUBSEQUENTLY IS DIRECTED ONLY AT PERSONS WHO ARE "QUALIFIED INVESTORS" WITHIN THE MEANING OF ARTICLE 2(1)(E) OF THE DIRECTIVE 2003/71/EC (THE "PROSPECTUS DIRECTIVE") ("QUALIFIED INVESTORS") AND PURSUANT TO THE RELEVANT IMPLEMENTING RULES AND REGULATIONS ADOPTED BY EACH RELEVANT MEMBER STATE. ANY PERSON IN THE EEA OTHER THAN THE UNITED KINGDOM WHO ACQUIRES THE BONDS IN ANY OFFER (AN "INVESTOR") OR TO WHOM ANY OFFER OF BONDS IS MADE WILL BE DEEMED TO HAVE REPRESENTED AND AGREED THAT IT IS A "QUALIFIED INVESTOR", (AS DEFINED ABOVE). ANY INVESTOR WILL ALSO BE DEEMED TO HAVE REPRESENTED AND AGREED THAT (I) ANY BONDS ACQUIRED BY IT IN THE OFFER HAVE NOT BEEN ACQUIRED ON BEHALF OF PERSONS IN THE EEA OTHER THAN QUALIFIED INVESTORS, OR PERSONS IN THE UK AND OTHER MEMBER STATES (WHERE EQUIVALENT LEGISLATION EXISTS) FOR WHOM THE INVESTOR HAS AUTHORITY TO MAKE DECISIONS ON A WHOLLY DISCRETIONARY BASIS AND (II) THE BONDS HAVE NOT BEEN ACQUIRED WITH A VIEW TO THEIR OFFER OR RESALE IN THE EEA TO PERSONS WHERE THIS WOULD RESULT IN A REQUIREMENT FOR PUBLICATION BY THE ISSUER, THE GUARANTOR OR BY CREDIT SUISSE SECURITIES (EUROPE) LIMITED OR UBS LIMITED (TOGETHER, THE "JOINT BOOKRUNNERS") OF A PROSPECTUS PURSUANT TO ARTICLE 3 OF THE PROSPECTUS DIRECTIVE. THE ISSUER, THE GUARANTOR, THE JOINT BOOKRUNNERS AND ANY OF THEIR RESPECTIVE AFFILIATES, AND OTHERS, WILL RELY UPON THE TRUTH AND ACCURACY OF THE FOREGOING REPRESENTATIONS AND AGREEMENTS.

THIS ANNOUNCEMENT IS NOT A SUMMARY OF THE OFFERING AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE OFFERING CIRCULAR TO BE PREPARED IN CONNECTION WITH THE OFFERING (THE "OFFERING CIRCULAR"). THIS ANNOUNCEMENT DOES NOT PURPORT TO IDENTIFY OR SUGGEST THE RISKS (DIRECT OR INDIRECT) WHICH MAY BE ASSOCIATED WITH AN INVESTMENT IN THE BONDS. EACH INVESTOR SHOULD READ THE OFFERING CIRCULAR FOR MORE COMPLETE INFORMATION REGARDING THE BONDS BEFORE MAKING AN INVESTMENT DECISION.

THE JOINT BOOKRUNNERS ARE ACTING ON BEHALF OF THE ISSUER AND NO ONE ELSE IN CONNECTION WITH THE BONDS AND WILL NOT BE RESPONSIBLE TO ANY OTHER PERSON FOR PROVIDING THE PROTECTIONS AFFORDED TO CLIENTS OF THE JOINT BOOKRUNNERS, OR FOR PROVIDING ADVICE IN RELATION TO THE BONDS.

NO REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, IS OR WILL BE MADE AS TO, OR IN RELATION TO, AND NO RESPONSIBILITY OR LIABILITY IS OR WILL BE ACCEPTED BY THE JOINT BOOKRUNNERS, OR BY ANY OF THEIR AFFILIATES, OFFICERS, EMPLOYEES OR AGENTS AS TO OR IN RELATION TO THE ACCURACY, COMPLETENESS OR VERIFICATION OF THIS ANNOUNCEMENT, THE OFFERING CIRCULAR, PUBLICLY AVAILABLE INFORMATION ON THE ISSUER OR THE GUARANTOR OR ANY OTHER WRITTEN OR ORAL INFORMATION MADE AVAILABLE TO ANY INTERESTED PARTY OR ITS ADVISERS AND ANY LIABILITY THEREFOR IS HEREBY EXPRESSLY DISCLAIMED.

IN CONNECTION WITH THE OFFERING, THE JOINT BOOKRUNNERS AND THEIR RESPECTIVE AFFILIATES MAY, FOR THEIR OWN ACCOUNT, ENTER INTO ASSET SWAPS, CREDIT DERIVATIVES OR OTHER DERIVATIVE TRANSACTIONS RELATING TO THE BONDS AND/OR THE UNDERLYING ORDINARY SHARES AT THE SAME TIME AS THE OFFER AND SALE OF THE BONDS OR IN SECONDARY MARKET TRANSACTIONS. THE JOINT BOOKRUNNERS AND ANY OF THEIR RESPECTIVE AFFILIATES MAY FROM TIME TO TIME HOLD LONG OR SHORT POSITIONS IN OR BUY AND SELL SUCH SECURITIES OR DERIVATIVES OR THE UNDERLYING ORDINARY SHARES. NO DISCLOSURE WILL BE MADE OF ANY SUCH POSITIONS OTHER THAN AS REQUIRED BY APPLICABLE LAWS AND DIRECTIVES.

IN CONNECTION WITH THE OFFERING, THE JOINT BOOKRUNNERS AND ANY OF THEIR RESPECTIVE AFFILIATES ACTING AS AN INVESTOR FOR THEIR OWN ACCOUNT MAY TAKE UP BONDS OR THE UNDERLYING ORDINARY SHARES AND IN THAT CAPACITY MAY RETAIN, PURCHASE OR SELL FOR THEIR OWN ACCOUNT SUCH SECURITIES AND ANY SECURITIES OF THE ISSUER OR ANY RELATED INVESTMENTS AND MAY OFFER OR SELL SUCH SECURITIES OR OTHER INVESTMENTS OTHERWISE THAN IN CONNECTION WITH THE OFFERING. THE JOINT BOOKRUNNERS DO NOT INTEND TO DISCLOSE THE EXTENT OF ANY SUCH INVESTMENT OR TRANSACTIONS OTHERWISE THAN IN ACCORDANCE WITH ANY LEGAL OR REGULATORY OBLIGATION TO DO SO.

 

END

 

 

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