Ailing broadcaster CME looks to Time Warner for capital boost

Reuters

PRAGUE, Oct 30 (Reuters) - Lossmaking broadcaster CentralEuropean Media Enterprises (CME) said onWednesday it needed more money to stay afloat and was trying tosecure extra financing from its main shareholder, Time Warner.

CME, which has been battling a slumping advertising marketin central and eastern Europe, said it no longer expected tomake a core profit this year, blaming a weaker outlook in itsCzech and Slovak markets.

There was no certainty that the preliminary discussions withTime Warner on a possible capital transaction, including debt,would come to anything, CME said in its third-quarter earningsstatement. It forecast negative free cash flow of $140 millionfor full-year 2013.

"If we are unable to secure additional financing, we will beunable to meet our debt service obligations and generally fundour operations sometime within the next twelve months," CMEsaid.

"Due to the level of negative free cash flow anticipated for2013, we will need additional capital and we are currentlyevaluating all options available to us, including debt andequity financings, asset sales and the renegotiation of paymentobligations with a number of major suppliers," it added.

CME had net debt of $795 million at the end of June.

CME, which operates television stations in six central andeastern European markets, cut its forecast for full-year 2013revenue to between $640-$650 million and also said it expected aloss of between $30-40 million on the level of operating incomebefore depreciation and amortisation (OIBDA).

It previously expected 2013 revenue of $700-$720 million andpositive OIBDA of $50-$70 million.

The broadcaster, founded by billionaire Ronald Lauder in1994, reported revenue of $135.8 million in the third quarter,versus $130.1 million seen in a Reuters poll, and an OIBDA lossof $32.4 million, wider than an $8.8 million loss expected.

CME already cut its outlook following the second quarterafter TV advertisers balked at higher prices, especially in itslargest market, the Czech Republic.

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