Reuters: Hot Stocks: Broadcaster CME seeks $400 mln to cut debt as ad revenues plunge

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Broadcaster CME seeks $400 mln to cut debt as ad revenues plunge Apr 29th 2013, 12:11 PRAGUE, April 29 | Mon Apr 29, 2013 8:11am EDT PRAGUE, April 29 (Reuters) - Loss-making broadcaster Central European Media Enterprises (CME) plans to raise around $400 million gross, mostly from top shareholder Time Warner, to cut debt amid plunging advertising revenues. CME, which owns television channels in six central and eastern European markets, said on Monday it had started a public offering to raise around $174 million gross and that Time Warner had committed to buying 49.9 percent of the class A stock to maintain its stake at that level. CME said it also planned to sell around $200 million of class B preferred stock to Time Warner in a private placement. CME, which also posted a $109 million net loss for the first quarter, is struggling as weak local economies have blunted advertisers willingness to spend and cash-strapped consumers have balked at its attempt to raise prices. At 1135 GMT, CME shares were down 9.6 percent at 78.05 euros, reflecting the fact that the new stock will dilute earnings for shareholders. CME said it would use $300 million of the net proceeds from the offering and sale of preferred stock to buy back a portion of 11.625 percent senior notes due in 2016 and for business operations. Chief Executive Adrian Sarbu said the company would press ahead with price rises, such as double-digit percentage increases in the Czech Republic, its biggest market. "Our pricing actions in the Czech Republic and across our region will continue as we are determined to reverse the trend of declining TV advertising spending," he said. First-quarter revenue fell 18 percent to $137 million. CME will hold a conference call at 1230 GMT. (Reporting by Jason Hovet and Jan Korselt; Editing by Mark Potter) Link this Share this Digg this Email Reprints

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