Time Warner has committed to a series of refinancing and loan deals for CME and upped its voting interest in the central and eastern European broadcast group to 49.9%.
Its total obligations across the financial deals is, credit analysts said, US$573 million, a sum that equates to less than 10% of the media giant’s EBITDA and which it can easily sustain, the financial experts added.
Along with the Time Warner refinancing, CME has also secured a new €285 million (US$356 million) credit facility, with Time Warner as guarantor.
The financial transactions were announced last Friday and credit analyst Moody’s said yesterday they would impact Time Warner’s rating.
“Since the total obligation being guaranteed by Time Warner, around US$573 million, is less than 10% of Time Warner’s EBITDA, and CME’s EBITDA [for the last twelve months] was less than US$100 million, these adjustments will not move the needle on leverage for Time Warner,” Moody’s noted.
The financial deals mean that the next round of debt is due to repayed at end-2017 and CME management said the transactions will allow it to reduce its costlier obligations.
“The transactions we have announced reflect the improved financial position following the turnaround evident in our results and deliver a number of important benefits,” said CME joint CEOs Michael Del Nin (pictured) and Christoph Mainusch.
They added: “Together, these transactions better position the company to begin reducing its leverage over time as the turnaround in operations continues, while maintaining our flexibility to refinance the 15% senior secured notes due 2017 at any time.”
Prague-listed CME reported an uptick in revenues of US$140 million in its most recent quarter and a net loss of US$52.5 million.
Time Warner, meanwhile, has been gradually increasing its ownership and control of CME, with Time Warner CEO Jeff Bewkes characterising the company as offering “interesting long-term opportunities”.