LONDON (Reuters) – Troubled UK television licencing firm Entertainment Rights (ERT.L), the company behind children’s programmes Postman Pat, Rupert Bear and He-Man, has sold its core businesses to private equity firm Boomerang Media.
But shareholders will not see any of the proceeds, the company said in a statement on Wednesday, and administrators from Deloitte LLP [DLTE.UL] have been appointed after Entertainment Rights failed to restructure its debts.
“Despite the financial support of the group’s lender (Bank of Scotland) through this period, the group has been unable to achieve a solvent restructuring of the company,” Deloitte said.
The so-called pre-pack sale allows for a company to be sold immediately after being placed in administration, allowing for the profitable parts of a firm to remain in business. Prepacks have attracted controversy because the procedure allows businesses to continue trading without the debts they have built up.
Shares of Entertainment Rights were suspended from trading and the listing was cancelled on Wednesday. However, the main trading businesses in the UK and the U.S. are not in administration and are trading as normal, the company said.
The units have been acquired by Boomerang Media, a company backed by the Chicago-based private equity group GTCR.
The amount paid was not disclosed, though the company said the figure was less than its debts, so no money will be returned to shareholders. Its debts at the end of Oct. 2008 totalled 125 million pounds ($179.3 million), at the same date it reported a loss of 105 million pounds.
Shares in the company, which have slumped from more than 35 pence in early 2007 to only a fraction of a penny, had been trading down 15.4 percent on the day at 0.11 pence at the time of their suspension.
Entertainment Rights said in February it was in talks over the sale of assets but had warned that while offers received would be acceptable to the company’s board and its lender they would not be enough to cover all its outstanding debt. ($1=.6971 Pound)
(Reporting by Tom Freke; Editing by Paul Hoskins, Sharon Lindores)