RTP debt in excess of $1.4 billion
LISBON — Potugal’s economic meltdown continues with pubcaster RTP downgraded to junk status by ratings agency Moody’s on Tuesday.The pubcaster operates nine channels and has annual operating costs of around €250 million ($357.5 million) and total debt in excess of $1.4 billion. As part of a financial restructuring agreement signed in 2003 for the 2003-2019 period, advertising revenues from the pubcaster’s flagship channel RTP1 are dedicated exclusively to servicing the company’s debt, estimated to be around $71.5 million per year. Despite deep cost cuts since 2003, which avoided further escalation of its debt mountain, RTP is completely dependent on an annual state grant and a levy on electricity consumers. It is highly vulnerable in Portugal’s current economic and climate. On Thursday the government was forced to request a bailout from the European Union and the Intl. Monetary Fund. The move comes after Portuguese banks announced that they were not prepared to lend any more money to public sector companies until the country signed an EU bridge loan or bailout.