There’s been air of inevitability about CME’s exit from Ukraine for a number of months despite repeated claims it was committed to the country.
While the sale of Studio 1+1 and Kino displays sound business logic, it unfortunately also sends out a negative message about Ukraine, which has recently been hit from pillar to post by economic and political problems.
Tellingly, in a statement CME’s president and CEO Adrian Sarbu described the deal as “the best strategic option for (the company) in the current climate” and one that will allow it to “concentrate on our existing operations in the EU and EU accession countries.”
Given the size of the proceeds from the sale, CME will be well placed to perhaps seek out acquisitions elsewhere in the region. It continues to be linked with the Polish regional station TV Puls, which up until just over a year ago was backed by News Corp, and moving back into the country, where it once co-owned TVN, would make sense.
At the same time, it could be tempted to dispose of another one of its existing assets. However, while Ukrainian was the obvious “first choice”, there is no clear second one.
Indeed, its operations in the Czech Republic, grouped under the Nova banner, are the jewel in the crown and almost untouchable. Arguably, those in Romania and Slovakia are also too valuable for CME to sell.
Back in Ukraine, the sale of Studio 1+1 and Kino to Harley Trading Limited, which is owned by Igor Kolomoisky, has effectively overridden one struck between CME, Kolomoisky and another local businessman named Ihor Surkis last July. Under it, the two Ukrainians secured a 49% stake in the two services in exchange for a station named TET TV Channel, which would have been integrated into CME’s Ukrainian operation.
Since the latest deal was announced, Kolomoisky has been reported in the local press as saying he will both retain the current management and increase investment at Studio 1+1 and Kino.
It’s important to note that he will in addition remain a director and shareholder at CME, thereby retaining a link between the company and its former Ukrainian interests.