Media and entertainment company Central European Media Enterprises Ltd. (CME) has agreed to sell its leading broadcast operations in Croatia (Nova TV) and in Slovenia (POP TV) to Slovenia Broadband S.à r.l., a subsidiary of United Group B.V, subject to certain closing conditions, including regulatory approvals. The transaction – which CME says will assist in establishing a more appropriate leverage profile for its operations – is expected to close by year-end. CME operates businesses in six Central and Eastern European markets with an aggregate population of approximately 50 million people.
Highlights of the transaction:
“This represents a transformational moment in the history of CME,” advised Michael Del Nin, Co-Chief Executive Officer. “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.”
“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,” added Christoph Mainusch, Co-Chief Executive Officer. “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.”