Telecom Italia Media (TIM) has agreed to sell Italian national broadcaster La7 to Cairo Communications for €1 million.
The deal involves the channel La7 and La7d, but not the 51% share in MTV Italia channels, which continue to remain with TIM as well as its DTT broadcast operations.
The television company will be recapitalised before the sale and Telecom Italia, the controlling investor in Telecom Italia Media, agreed to waive €100 million of receivables owed by its media unit.
Before the transfer of the shareholding, La7 will undergo a capital increase that will leave it with a net positive financial position not higher than €88 million. The recapitalisation will also bring the broadcaster’s shareholders equity up to the agreed level of €138 million.
The agreement also calls for TIM’s broadcast facilities to continue broadcasting the La7 channels over its digital terrestrial network.
Cairo Communications was already involved with La7 as the seller of airtime on the channels. Despite heavy investments in programming, La7 never turned any profit.
TIM also said that MTV will focus on the free-to-air sector, after the sale of non-core satellite channels to Viacom in late 2012.
The company plans greater attention to entertainment and significant investments in content and communications, with the aim of increasing audience share results.
