Stock transfer worth $89 mil was part of loan deal
LONDON–Time Warner upped its stake in Ron Lauder’s Central European Media Enterprises to 40% after concluding a stock transfer worth a total of $89 million as part of a loan deal with the company.
Prague-based CME transferred around 9.9 million in shares to Time Warner and a further two million to Lauder’s holding company RSL Capital, valuing the stock at $7.51 a share.
Friday’s move comes six weeks after Time Warner agreed to lend CME $300 million and was the first of three planned transactions aimed at lowering the broadcaster’s debt.
The terms of the deal allow CME, founded by Lauder who now serves as non-executive chairman, to pay off loan tranches early. It also gives Time Warner the right to acquire up to 49.9% of the company if any remain outstanding for more than 180 days.
CME runs a stable of six TV stations in countries including the Czech Republic, Romania and Bulgaria and has seen debt costs rise as revenue has been hit by recession.
CME CEO Adrian Sarbu said: “The continued support from our major shareholders during volatile market conditions allows us to proceed with achieving our targets of reducing our leverage and interest costs.”