Britain’s GWR has announced it will sell its 25% stake in DMG Australia. DMG may buy back the share.
GWR had the option to increase its stake in DMG to 75% as a result of an earlier deal with DMG, but GWR has now decided to “leave its Australian and European businesses to concentrate on opportunities in the UK.”
GWR executive chairman Ralph Bernard told AAP: “We decided it did not make sense to spend time and money on development 12,000 miles away when the really exciting things are happening in the UK.”
GWR hopes to earn about £70 million by selling its overseas interests, with the cash to be used to ease debts of £164 million. The company recently announced annual results of £7.7 million profit, a drop of £14 million on last year. The profit slump has been blamed on advertising market weaknesses and also included £1.3 million worth of losses from its share of the startup investment in DMG’s Nova stations. GWR reported an increase in profits from its new digital radio ventures.
GWR also hopes to sell its European assets as well as those in Australia: “We have some loss-making businesses in Europe that we would like to exit sooner rather than later but this is not a fire sale,” said Bernard.
GWR has a market value of around £322 million and owns 32 stations in the UK.