Music group considers share issue

Sir Elton John is one of the names in Sanctuary's stable

UK music management business and record label Sanctuary has said it is considering a new share issue as a means of cutting its debts.

The firm - whose stable of artists include Sir Elton John, Beyonce and Morrissey - said it recognised its level of debt was "too high".

The board said it was "actively exploring" a number of options for the medium and long-term financing.

"One of these options is a significant equity fund raising," it added.

Press reports have suggested that this could see a rights issue of about £100m, which would see the stakes of existing shareholders significantly reduced.

Sanctuary also said it was in "active discussions" to sell its music publishing and studios businesses.

It added that it was likely to make write-downs and provisions of between £130m-£170m ($225m-$294m) in its annual results.

Sanctuary's market value has fallen to about £12m, from a peak of about £240m in 2001.

In October, Sanctuary said it would cut its workforce by a quarter, or 175 jobs, after a series of profit warnings.