Disposal
April 09 2009 - 11:53AM
UK Regulatory
TIDMTLR
RNS Number : 4734Q
Local Radio Company PLC (The)
09 April 2009
9 April 2009
THE LOCAL RADIO COMPANY PLC ("LRC" OR THE "COMPANY")
SALE OF JAZZ FM BUSINESS
Following a strategic review, and as referred to in the Open Offer document
posted to shareholders on 6 March 2009, the Company today announces the sale by
it and Trinity FM Limited ("Trinity") of its Jazz FM business to Jazz
Investments Limited, a company established by Richard Wheatly (a former director
of the Company and Trinity) and Alistair Mackenzie (a former director and
employee of the Company).
Trinity had, since 1 October 2008, operated a radio service and website known as
Jazz FM on behalf of GMG Radio Holdings Limited ("GMG") under a three year
operating agreement with GMG (the "Jazz FM Business").
Under the terms of the operating agreement with GMG the Company guaranteed the
obligations of Trinity under that operating agreement. The Company also owned
certain assets and was party to certain contracts used in or required for the
operation of the Jazz FM Business.
The consideration received by the Company and Trinity for the disposal of the
Jazz FM Business is GBP1 together with the assumption by Jazz Investments
Limited of Trinity's liability to GMG of GBP195,510 which would otherwise have
been due to be discharged by Trinity on 31 March 2009.Also, as a consequence of
the disposal of the Jazz FM Business Trinity has avoided incurring redundancy
related expenses of approximately GBP258,000. The assumption by Jazz Investments
Limited of the liability to GMG as part of the consideration for the disposal of
the Jazz FM Business and the avoidance of those redundancy related expenses
improves the Company's cash flow position which (following the Company's general
meeting on 1 April 2009 at which the proposed open offer to raise approximately
GBP1.51 million (before expenses) for the Company did not receive sufficient
shareholder support to proceed) the Board continues to review carefully.
In the period from 1 October 2008 to 31 March 2009 the Jazz FM Business operated
at a loss of GBP733,000 and the assets used in, and disposed of with, the Jazz
FM Business have a book value of GBP61,000.
For the purposes of Rule 13 of the AIM Rules for Companies, the Board, having
consulted with its nominated adviser, Ruegg & Co Limited, considers that the
terms of the sale of the Jazz FM Business are fair and reasonable in so far as
the Company's shareholders are concerned.
For further information please contact:
Rhys Davies
The Local Radio Company plc
Tel: 01494 688 200
Roxane Marffy/Brett Miller
Ruegg & Co Limited
Nominated Adviser & Broker
Tel: 020 7584 3663
This information is provided by RNS
The company news service from the London Stock Exchange
END
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