CME agrees network sales

Central European Media Enterprises (CME) has a agreed a €230m (US$263m) deal to sell its broadcast operations in Croatia and Slovenia.

Slovenia Broadband, a subsidiary of United Group which is itself majority owned by US investment firm KKR, is buying CME’s Nova TVin Croatia and Pop TV in Slovenia with the deal expected to be completed by the end of the year.

Proceeds from the sale, which remains subject to regulatory approvals, will be used to repay a €250m term loan due in 2018 and will help the company to reduce the cost of its borrowing.

CME said the cash generated by the Slovenian and Croatian operations would “be more than offset” by estimated savings of at least $30m of interest costs annually.

Michael Del Nin, co-CEO, said the deal 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.”

Del Nin said the proceeds from the sale “will greatly accelerate our plans for debt reduction” and cut the company’s average borrowing rate by more than a third.

Christoph Mainusch, co-CEO, added that despite the sales, CME remained “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.

CME broadcasts 36 television channels across Central and Eastern Europe, including bTV in Bulgaria, Doma in Croatia, Nova in the Czech Republic and MTV Romania.

CME has had a turbulent history over recent years, suffering an advertising collapse in its key markets in 2013 that threatened the future of the firm.

The broadcaster agreed a deal to prop up its operations with major shareholder Time Warner, which saw the US firm’s stake rise to 75.1%, and Del Nin and Mainusch were brought in to turn the company around.

More recently CME agreed a deal with German distributor Beta Film to sell its programming internationally and secured a regional deal with BBC Worldwide for entertainment format Dancing with the Stars.