Central European Media Enterprises (CME) is selling its Croatian (Nova TV) and Slovenian (Pop TV) broadcast interests as it looks to repay a €250 million term loan due in 2018.
Slovenia Broadband – a subsidiary of United Group – is set to buy the pair for €230 million.
The transaction, which is subject to certain regulatory conditions, is expected to close by the end of this year.
CME co-CEO Michael Del Nin 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 million in annual interest costs.”
Christoph Mainusch, CME 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.”