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LJUBLJANA (Slovenia), January 18 (SeeNews) – International broadcaster Central European Media Enterprises (CME) said on Friday it has terminated the agreement for the sale of its operations in Slovenia announced in July 2017 and will instead retain its operations in the country.
“Since we announced our intention to sell our Slovenian business 18 months ago in order to accelerate deleveraging, we have repaid approximately 370 million dollars (325 million euro) in loans, reducing our gross debt by about 30%, and cut our average borrowing cost by more than half to 3.5%,” CME’s co-chief executive officer, Michael Del Nin, said on a statement.
CME operates five television channels in Slovenia: POP TV, Kanal A, Brio, Oto and Kino.
Michael Del Nin also said that Slovenia has grown its revenues significantly and reached a level of profitability that it hasn’t seen in a decade.
“On a five country basis, our Operating income before depreciation and amortization (OIBDA) growth rates for both 2018 and 2019 should exceed what we have been expecting from only four,” Michael Del Nin noted.
He added that the accelerated growth means that even without the proceeds from the planned sale, CME's net leverage ratio should approach 3x by the end of first quarter, a delay of just one quarter compared to the management expectations if the sale had been completed.
“We are strong believers in the value of television assets and the future of the Slovenian operations, which have been confirmed by its spectacular growth over the last year. We look forward to continuing to work with the team at POP TV in our longstanding tradition of providing objective news and the best entertainment for Slovenia," CME’s co-chief executive officer, Christoph Mainusch, said.
CME noted it will present the results of the Slovenian business as continuing operations when announcing its full year 2018 results.
For the last twelve months ended September 30, 2018, OIBDA for the Slovenian operations was $20.8 million, CME operating income was $162.3 million and OIBDA was $208.4 million, and run-rate annual debt service obligations for CME were $29.0 million.
In August 2018, CME said it completed the sale of its Croatian business Nova TV to Slovenia Broadband, a subsidiary of multi-play operator United Group. CME received from the purchaser a cash consideration of 86.4 million euro, inclusive of a 1.4 million euro estimated net working capital adjustment, the company said in a filing with the US Securities and Exchange Commission at the time.
In July 2017, CME said that it has agreed to sell POP TV to Slovenia Broadband and that the transaction was expected to close by the end of 2017.
CME is a media and entertainment company operating leading businesses in five Central and Eastern European markets. It currently broadcasts 31 television channels in Bulgaria, the Czech Republic, Romania, the Slovak Republic and Slovenia.
($ = 0.87786 euro)