Bloomberg News

CME Jumps for Seventh Day in Prague on Debt-Reduction Plan

May 03, 2012

Central European Media Enterprises Ltd. (CETV:US) rose for a seventh day in Czech trading, headed for the longest stretch of gains since September 2009, on optimism that the television broadcaster’s debt will decline.

The stock of Bermuda-registered CME climbed 7.7 percent to 167 koruna by 10:48 a.m. in Prague, making it the best performer today in the PX (PX) equity index, which was little changed.

Moody’s Investors Service said yesterday it may upgrade its B3 corporate family rating on CME after the broadcaster said on April 30 that Time Warner Inc. (TWX:US), its biggest shareholder, will provide a $300 million loan to help repay debts coming due next year and increase its stake in the company to 40 percent.

“The transaction will see CME emerge with an improved liquidity profile as the company will have no debt maturing until the 2014 notes come due,” the ratings company said in an e-mailed statement. “The decrease in debt should also help CME in reversing the trend of producing negative cash flows.”

Time Warner and billionaire Ronald Lauder’s RSL Capital LLC will pay $86.4 million for 11.5 million Class A shares, and CME will use proceeds from the sale to repay part of the new loan, according to the company’s April 30 statement.

To contact the reporter on this story: Krystof Chamonikolas in Prague at kchamonikola@bloomberg.net

To contact the editor responsible for this story: Gavin Serkin at gserkin@bloomberg.net


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Companies Mentioned

  • CETV
    (Central European Media Enterprises Ltd)
    • $2.34 USD
    • -0.01
    • -0.43%
  • TWX
    (Time Warner Inc)
    • $77.19 USD
    • -0.50
    • -0.65%
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