Central European Media Enterprises (CME) has agreed to sell its broadcast interests in Croatia (Nova TV) and Slovenia (Pop TV) to Slovenia Broadband, a subsidiary of United Group, for €230 million in cash.
The transaction, which is subject to certain regulatory conditions, including regulatory approvals, is expected to close by the end of this year.
In a statement, CME says that the proceeds of the sale will be used to repay a term loan of €250.8 million due in 2018, based on its results at the end of Q1 this year.
Commenting on the sale, CME’s Michael Del Nin, co-CEO, said: “This represents a transformational moment in the history of CME. We have always had a great set of assets, and this transaction underscores the enduring attractiveness of broadcasters in the region. It also moves us significantly closer to our long-held goal of establishing a more appropriate leverage profile for our operations. Once closed, the cash proceeds from this sale will greatly accelerate our plans for debt reduction, lowering our net leverage ratio by about one turn, cutting our current average borrowing rate by more than a third, and helping us to save over $30.0 million in annual interest costs.”
Christoph Mainusch, CME’s co-CEO, added: “We are very proud of these well-run businesses in Croatia and Slovenia, and the people working there whose efforts have made the channels consistent market leaders. We are firm believers in the importance of television as a medium, and plan to continue operating television stations with scale in a more focused footprint of our largest markets. We were pleased that the United Group, majority owned by the US investment firm KKR and backed by the European Bank for Reconstruction and Development, shares our outlook for local content on television and we believe they will be excellent stewards of these important businesses in the region going forward.”
United Group was formed in 2007 through the combination of SBB and Telemach and is today the largest alternative telco operating in the former Yugoslavia, providing TV, internet, a fixed and mobile telephony via its cable, DTH and OTT platforms. It also operates a worldwide OTT platform named NetTVPlus.
Broadband TV News notes that the sale of Croatia and Slovenia represents a major shift in strategy for CME. It has only previously exited two broadcast markets in almost a quarter of a century in Central and Eastern Europe, namely Poland and Ukraine. Once completed, it will only have a presence left in the Czech Republic, Slovakia, Bulgaria and Romania.
