CME has agreed to sell its top broadcast operations in Croatia and Slovenia for €230 million, in what it described as a “transformational moment” for the company.
Central European Media Enterprises made a deal to sell commercial networks Nova TV in Croatia and Pop TV in Slovenia to United Group subsidiary Slovenia Broadband.
The deal was agreed for a cash purchase price of €230 million, which CME said it would use to repay a €250.8 term loan that is due in 2018, thereby reducing its debt and and cutting its average borrowing rate by more than a third.
CME said that Nova and Pop TV’s combined operating income before depreciation and amortisation (OIBDA) for the twelve months ending March 31, 2017 was US$13.8 million.
It claimed that the cash generated by the Slovenian and Croatian operations will be “more than offset” by estimated savings of at least US$30.0 million of interest costs annually.
“This represents a transformational moment in the history of CME,” said co-CEO Michael Del Nin. “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.”
Co-chief executive officer Christoph Mainusch added: “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.”
Nova TV was Croatia’s first private commercial TV station and was acquired by CME in 2004, having first launched in 2000. It broadcasts news and current affairs, locally-produced programming and international content targeted at a local audience.
Slovenia’s Pop TV began broadcasting in 1995 and broadcasts reality TV and entertainment programmes, and a host of local productions – including news and current affairs shows and local versions of formats like MasterChef and Your Face Sounds Familiar.
CME is a media and entertainment company that operates businesses in six Central and Eastern European markets – Bulgaria, Croatia, Czech Republic, Romania, Slovakia and Slovenia.
The deal with Slovenia Broadband is expected to close by the end of the year, subject to certain closing conditions, including regulatory approvals.