Media Square, the company which owns CMW, Twentysix and the Gate Worldwide, is being forced to flog off one of its offices – Studlands Park in Newmarket – to reduce its debt.
The proceeds of the £3.25m sale – to Writtle Holdings – will be paid into the group’s bank in order to reduce its debt, with £0.7m being used to pay off its existing property loan that is associated with the building.
Last week, the marketing communications group revealed pre-tax profits of £1.4m for the first six months of its financial year,
Despite putting the remaining sum towards its debt, the group has said that while it will reduce long-term debt it will not alter ‘the position with regard the group’s overall level of cash headroom’.
The group is reportedly in talks with its bank about providing a new long-term banking facility and has been undertaking a ‘detailed 12 month cash flow forecast exercise’ which has also seen Media Square request additional facilities from the bank to allow it to meet future working capital requirements.
Alongside the pre-tax loss, the company also revealed that it had witnessed a decline of revenue of 2% in the first six months of trading within its financial year.
Earlier this year, the company was reported to have held early, informal discussions with a number of parties both from within the industry and in private equity to either sell or merge its business.
Investment firms believed to have run the slide rule over the company in recent months include Lloyds Development Capital and HIG Capital, which last year invested £62.5m in marketing firm The Engine Group.
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