Company sets share price for new issue

BERLIN — Germany’s biggest pay TV operator, Premiere, has begun to implement its plan to refinance its debt with the backing of its largest shareholder, Rupert Murdoch’s News Corp.

Premiere intends to raise at least $34 million initially by issuing up to 10.2 million new shares as part of a two-phase capital increase intended to generate $615 million.

Premiere CEO Mark Williams has said the company’s survival depends on the successful implementation of the plan. The money-losing feevee operator has said it will not reach profitability before 2011.

The company has set the price of its new shares at Euros 3.76 ($5.15). The price of the shares reflects the average share price of Premiere on XETRA, the Frankfurt Stock Exchange’s electronic securities trading system from the beginning of the subscription period from Dec. 30 through Jan. 8.

News Corp., which controls 25% of the group, is backstopping the share issue, pledging to invest $34 million in new Premiere shares but keeping its share below 29.9%.

As part of the plan agreed to last month with News Corp. and lenders, Premiere’s bank syndicate agreed to provide up to $34 million in short-term bridge financing to complement the capital increase, providing a combined $68.5 million to meet funding requirements until a second capital increase is completed.

The second equity increase, scheduled for the first half of 2009, is intended to raise the remaining amount necessary to reach the target figure of $615 million.

News Corp. has agreed also to stand behind the second share increase, but only if a number of conditions are met. These include the availability of new long-term credit lines and a government waiver from the legal requirement to submit a mandatory takeover offer if its stake in Premiere exceeds 30%.

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