NORTHERN IRELAND media group UTV says “potentially worsening financial markets” have forced it to bring forward plans to raise nearly £50 million in a new rights issue.

Belfast-based UTV saw its share price drop sharply yesterday as it announced details of the new rights issue aimed at existing shareholders.

The group currently operates the ITV franchise in Northern Ireland and owns 24 radio stations throughout Britain and Ireland. It also has a new media division

UTV Media plans to raise £49.9 million by offering shareholders the opportunity to purchase two shares for every three they hold on June 17th at a price of 130p per share. This represents a discount of around 39 per cent on UTV’s closing price on Tuesday.

The group has disclosed that expenses relating to the rights issue, which has been fully underwritten by Numis and Goodbody Stockbrokers, are expected to be £3.2 million.

Shareholders will have to approve the rights issue, which could generate net proceeds in the region of £46.7 million.

In addition to the rights issue, the Belfast group announced that it has also put in place new five-year finance facilities with a group of banks led by Bank of Ireland.

Speaking to The Irish Times, UTV’s chief executive John McCann said the proceeds from the rights issue would help reduce its debt levels from “north of £150 million” to “north of £100 million”.

Commenting on the timing of the rights issue, Mr McCann said: “People assume that something must be wrong but the business is in good shape and is motoring ahead.”

He said the company was due to refinance its debt at the end of this summer, and had decided to bring that process forward in light of current financial market conditions.

“We asked ourselves could the market get worse between now and the end of the summer,” he said. “So we’ve decided to bring forward the refinancing and we’re getting it done now.”

Mr McCann said the fundraising would allow the company to reduce its gearing to more comfortable levels.