01.09.02
Treasury
agrees borrowing limit for 91福利社's commercial subsidiaries
The
Treasury has agreed a borrowing limit of 拢350 million for
the 91福利社's commercial subsidiaries, 91福利社 Ventures Group (encompassing
91福利社 Resources Ltd, 91福利社 Technology Ltd, 91福利社 Broadcast Ltd and Kingswood
Warren Ventures Ltd) and 91福利社 Worldwide Ltd.
John
Smith, 91福利社 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 91福利社 programming and services, for the benefit of
the licence fee-payer."
As
part of the agreement with the Treasury the 91福利社 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 91福利社 Worldwide and 91福利社 Ventures Group.
Notes
to Editors
The
91福利社's commercial subsidiaries exist to exploit 91福利社 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
91福利社's Fair Trading Commitment ensures there is no cross-subsidy
between public service and commercial activities.
91福利社
Worldwide has a target of quadrupling the cashflow it delivers to
the 91福利社 over the 10 years to 2006.
Last
year it delivered 拢106 million on turnover of 拢660 million.
91福利社
Ventures Group expects to record its first profit this year.
This
agreement allows the 91福利社's commercial subsidiaries to borrow up
to 拢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
91福利社's public service operation is funded by the licence fee, currently
拢112 (colour) or 拢37.50 (black & white).
The
91福利社's public service borrowing limit of 拢200 million is not
affected by the new agreement.
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