Central European Media Enterprises Ltd. (CME) has entered into an agreement with Harley Trading Limited, a company beneficially owned by Igor Kolomoisky, to sell 100% of the Studio 1+1 and Kino channels for cash consideration of $300 million plus an estimated $19 million to fund cash expenses of the Studio 1+1 group between signing and closing of the transaction, CME said in a statement.
"The purchaser will make a payment of $30 million to CME on February 1, 2010, and the balance of the purchase price will be paid at closing. The transaction is expected to close in the second half of April 2010," reads the statement.
Adrian Sarbu, President and CEO of CME, described the deal as "the best strategic option for CME in the current environment." "It will allow us to concentrate on our existing operations in the European Union and EU accession countries," he said. "The sale will provide us with greater operational and strategic flexibility, increase our liquidity and sharpen our focus on developing our broadcasting, Internet and content business. I look forward to continuing to work with Igor Kolomoisky, who will remain a director and shareholder of CME (he owns about 2.6% of stocks, Interfax-Ukraine note)," he said.
The agreement between CME and Kolomoisky foresees the termination of the previous deal dated July 2009 under which Kolomoisky and Ihor Surkis, who is a co-owner of the TET TV Channel and President of Dynamo Football Club, should have received control through Alstrom Business Corp. (controlled by both businessmen) over a 49% stake in Cyprus-based CME Cyprus, which owned the Studio 1+1 and Kino channels, in exchange for $100 million and the TET TV Channel, which was supposed to be integrated into the group of the Ukrainian channels.
According to the new terms, 100% of CME Cyprus will be transferred to Harley Trading Limited.
As Interfax-Ukraine learnt from the press service of the Studio 1+1 TV Channel, the process of integrating of the TET TV Channel into the group’s structure, which was announced by the channel’s management last autumn, has been suspended. "TET belongs to its former owner," said the press service.
As was reported, prior to the deal with CME, Kolomoisky and Surkis owned the TET TV Channel on a parity basis.
