PRAGUE (Reuters) - Central European Media Enterprises (CME) (CETV.O) (CETV.PR) will lower its borrowing costs and extend loan maturities under a new financing deal with the broadcaster’s main shareholder Time Warner TWX.N, it said on Thursday.
CME said it had agreed with Time Warner to reduce the fees payable to the U.S. media group on existing loan facilities. The arrangement will reduce its average cost of borrowing by 200 basis points to 4.0 percent from next month, CME said.
CME, active in television markets in the Czech Republic, Romania, Slovakia and Bulgaria, posted a 45 percent rise in first-quarter operating income before depreciation and amortization (OIBDA) to $30.7 million. Revenue rose 25 percent.
“This new financing package underscores the improved operating performance of CME and the progress we have made to restore its financial position,” co-Chief Executive Michael Del Nin said.
CME also extended the maturity date of an existing 235 million euro loan by two years to November 2021. The maturity date of an existing 469 million euro term loan was pushed back to April 2023.
It also increased the capacity of an existing revolving credit facility to $75 million, extending it to April 2023.
Boosted by rising television advertising revenue and stronger local currencies in its central and eastern European markets, CME has seen earnings rise and reworked financing deals with Time Warner in the past, helping cut costs on a debt pile that stood at $1.1 billion at the end of 2017.
Due to past deals, Time Warner exercised 100.9 million warrants in April. CME said it would use proceeds of $100.9 million, along with cash, to repay the 110.0 million euros outstanding balance of its 2018 euro term loan.
CME also said it would pay down debt with the proceeds from the sale of operations in Croatia and Slovenia, expected to close in the second quarter. That could lead to a further borrowing cost reduction of 80 basis points, to around 3.2 percent.
Reporting by Jason Hovet; editing by Jason Neely