Sanctuary Group plc today (Dec. 5) admitted it is likely to require addition funding "in the near term" as it confirmed it was closing in on the sale of its music publishing and studio businesses.

Sanctuary Group plc today (Dec. 5) admitted it is likely to require addition funding "in the near term" as it confirmed it was closing in on the sale of its music publishing and studio businesses.

In a statement issued to the London Stock Exchange, Sanctuary executives confirmed the new measures, which are intended to help prop-up the debt-laden firm. "The board recognizes that the level of debt in the group is too high and is actively exploring a number of options for the medium and long term financing of the group," the company said in the statement.

Sanctuary says it is also in "active discussions" regarding the disposal of its music publishing and studios businesses, once key aspects of its 360-degree business model.

The independent London-based group, which has issued a string of profits warnings and is now expecting to post a pre-tax loss for the full year, today said the charges would come in the form of "substantial" provisions and write-downs that would hit this year's annual results.

Although its full figures are still being audited, Sanctuary said the provisions and write-downs were "likely to be in the region of £130 million ($224 million) to £170 million" ($294 million). Sanctuary's full-year financial report is due Jan. 27, 2006.

"We continue to look around at deals," Sanctuary co-founder Andy Taylor tells Billboard.biz. "It's not our intention to sell the major chunks of our business. It's our intention to build on those. We're just tidying it all back to the roots, but the base of what we built remains strong."

As previously reported, Taylor is shifting from his current role as executive chairman to non-executive chairman. The move is intended to enable Taylor to focus on implementing the group's new business plan, the company has said.

Sanctuary said it had hired Evolution Securities, the investment bank business of London-based financial services firm Evolution Group, to explore a "significant" equity fundraising. Unconfirmed reports suggest the companying is seeking roughly £100 million ($173 million), with the intention of reducing some of its £120 million ($270 million) debt pile.

In the face of deepening financial troubles, the company-which has lately enjoyed success handling various career aspects for Morrissey, Robert Plant, Alison Moyet and others-recently has recently pared back its workforce by some 25% and in September sold off its non-core book publishing division. The company now redefines its core businesses as recorded product, merchandising, artist management and its live agency activities.

"We have progressed quickly and efficiently since the late summer and I am confident that the Board's response to the current situation has been the right one and one that will set Sanctuary on course for future success," said Taylor in today's statement.

Stock in the group slipped 15% in morning trading to 2.75p.

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