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Central European Media Enterprises Announces Final Steps in the Restructuring of Ukraine Operations
December 19, 2008, Hamilton, Bermuda
- CME to increase stake in Kino channel in Ukraine to 100% –
- Studio 1+1 to bring advertising sales in-house –
Hamilton, Bermuda – December 18, 2008 –Central European Media Enterprises Ltd. (“CME”) (Nasdaq/Prague Stock Exchange: CETV) announced today that it has entered into a preliminary agreement to buy out its minority partners in the Kino channel in Ukraine. CME also announced that it is launching an in-house sales department at Studio 1+1, its channel in Ukraine.
CME currently owns a 60.4% interest in each of the Kino and Citi channels in Ukraine. The remaining 39.6% interest is owned by Glavred Media Holding (“Glavred”) and another minority partner. Kino is an entertainment channel with 55% national reach through a network of local licenses and Citi is an entertainment and culture channel broadcasting in the Kiev region. Under the agreement, CME will acquire 100% ownership in the Kino channel in exchange for transferring to Glavred its ownership interest in the Citi channel and US$10 million in cash. In addition, CME will acquire a 10% ownership interest in Glavred from one of its shareholders for US$ 12 million. The transactions are expected to close in February 2009, upon completion of due diligence of Glavred, the negotiation and execution of definitive transfer agreements and the reissuance of Kino’s broadcasting licenses to reflect the change of ownership.
CME also announced that it is setting up an in-house sales department at Studio 1+1 to sell advertising on its channels. Studio 1+1 is therefore terminating its agreement with the sales house Video International. The total incremental cost for restructuring the sales operations is expected to be approximately US$ 10 million.
Adrian Sarbu, CME’s President and Chief Operating Officer, said: “The opportunity to gain 100% ownership in the Kino channel is crucial to the delivery of our strategy in Ukraine and our ability to compete through a multichannel model. 100% ownership of the Kino channel will give us full control and allow us to integrate Kino into the Studio 1+1 operations. We will be able to exploit the common programming and operating synergies of the two channels, which will strengthen our position in the Ukrainian market.Launching an in-house sales team at Studio 1+1 brings our Ukraine operations into line with our other markets.”
CME is a broadcasting company operating leading networks in seven Central and Eastern European countries with an aggregate population of approximately 97 million people. CME’s television stations are located in Bulgaria (TV2 and Ring TV), Croatia (Nova TV), Czech Republic (TV Nova, Nova Cinema, Nova Sport and MTV Czech), Romania (PRO TV, PRO TV International, Acasa, PRO Cinema, Sport.ro and MTV Romania), Slovakia (TV Markíza, Nova Sport and MTV Czech), Slovenia (POP TV and Kanal A) and Ukraine (Studio 1+1, Studio 1+1 International, Kino and Citi). CME is traded on the NASDAQ and the Prague Stock Exchange under the ticker symbol “CETV”.
For additional information, please contact:
Romana Wyllie
Vice President of Corporate Communications
Central European Media Enterprises
Krizeneckeho nam. 1078/5
152 00 Praha 5
Czech Republic
+420 242 465 525
romana.wyllie@cme-net.com
