By Manuela Mesco
MILAN--Italian broadcasting company Telecom Italia Media SpA
(TME.MI) said Monday it will sell its La7 television channels to
Cairo Communication SpA (CAI.MI) in a deal valued at 1 million
euros ($1.3 million).
La7 television channels are controlled by Telecom Italia Media,
a broadcasting company owned by Italy's largest telecommunications
operator Telecom Italia SpA (TI).
Cairo Communication, which also manages advertising for La7
channels, will buy La7 S.r.l. after a recapitalization, which will
bring La7's net financial position to EUR88 million and
shareholding equity of EUR138 million. The agreement includes that
the TV channels are sold without EUR100 million of debt owed to
Telecom Italia, Telecom Italia Media said in a statement.
The decision, during a board meeting in Milan, comes several
months after Telecom Italia decided to sell its television unit in
a bid to raise cash and reduce net debt.
Telecom Italia Media will now only own some television
frequencies and a 51% share in MTV Italia channel; it will continue
to be controlled by Telecom Italia.
Telecom Italia Media also reported Monday its net loss widened
in 2012 to EUR240.9 million from a loss of EUR83.8 million the year
earlier. The company's net debt stood at EUR260.1 million at Dec.
31 2012, nearly double the EUR138.7 million at the end of 2011.
Revenue fell to EUR222.7 million in 2012 from EUR238.2 million for
2011.
Telecom Italia Media said it expects revenue to increase at an
annual average rate of 11% and is targeting a positive net cash
flow from 2014, following the implementation of a three-year
strategy plan aiming at restoring the group's profitability. The
plan is expected also to lead to a rise in Ebitda, or earnigns
before interest, taxes, depreciation and amortization, at an annual
average rate of 36%.
Write to Manuela Mesco at manuela.mesco@dowjones.com
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