PRAGUE — U.S.-backed TV group Central European Media Enterprises is getting out of the Czech Republic after a stormy history that saw it lose its stake in broadcaster Nova TV and win $358 million damages from the territory for its troubles.
It has sold its Czech company CNTS for $53 million to PPF, the territory’s largest investment group.
PPF also is the majority owner of CET-21, which operates Nova TV. Former station director Vladimir Zelezny wrested control of Nova from Ronald Lauder’s CME in 1999, causing the company’s share price to plummet and sparking four years of court wrangles that finally cost the Czech Republic $358 million in damages for not protecting CME’s investment.
CNTS’ assets include prime real estate, a minority stake in the license to Nova TV and interest in CME’s outstanding court claims against Nova TV in Prague and Vienna that could have cost PPF $275 million.
PPF is expected to abandon the court cases.
Under the terms of the contract, PPF will pay CME in installments to be concluded in July. Transaction is not subject to tax, according to CME.
“We have agreed not to compete with PPF in the Czech Republic for the next two years,” CME vice chairman and chief exec Fred Klinkhammer said. “In addition, PPF has granted CME rights of first negotiation in the event they ever consider selling their interest in CET-21.”
That leaves open the possibility of CME returning to the Czech Republic. PPF originally said it was not a media company and had purchased Nova TV with the goal of selling it. Company reiterated that aim following the announcement.
CME operates six channels in Romania, Slovakia, Slovenia and the Ukraine.