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21st March 2013
MECOM GROUP PLC
Sale of Polish operations
Mecom Group plc ("Mecom" or the "Group") today announces that it has agreed the sale of its remaining Polish operations in two separate, but related, transactions (the "Transactions") for an aggregate consideration on a debt and cash free basis of approximately €4 million. The Transactions consist of:
· The disposal of Media Regionalne sp. z o.o. ("Media Regionalne" or the "Company") to Polskapresse sp. z o.o. ("Polskapresse") for consideration on a debt and cash free basis of PLN 8 million (approximately €2 million) (the "Media Regionalne Transaction"). The Group expects total cash proceeds to be approximately PLN 88 million (€21 million), taking into account the substantial cash balance held by the Company. Polskapresse is Poland's largest regional newspaper publisher; and
· The sale of the shares in the companies which operate the Radio Gra stations to Multimedia sp. z o.o. ("Multimedia") for consideration on a debt and cash free basis of PLN 9 million (€2 million) (the "Radio Sale"). Multimedia is a subsidiary of Grupa RMF, a leading operator of radio stations in Poland.
The Media Regionalne Transaction is subject to the terms and conditions of a share purchase agreement, which includes customary adjustments for net cash, minority interests and working capital as at completion.
The Media Regionalne Transaction is conditional upon, amongst other things, approval from the Polish Competition Authority (Prezes Urzędu Ochrony Konkurencji i Konsumentów). The Radio Sale was completed on 15 March 2013.
Stephen Davidson, Executive Chairman of Mecom, said:
"Although our management team and employees in Poland have done an impressive job of mitigating the pressure on advertising and circulation revenues, Media Regionalne is a sub-scale business in a challenging market. A sale to Polskapresse will enable important industry consolidation to take place, and we believe is also in the best interests of our shareholders.
"This deal, together with the related sale of our Polish radio operations, reduces our net debt and allows the Group to focus on the completion of the Strategic Review of the substantial operations in the Netherlands and Denmark."
Mecom Group plc 020 7925 7200
Stephen Davidson, Executive Chairman
Henry Davies, Group Finance Director
goetzpartners +49 89 29 07 25 0
Azimutus +48 22 375 74 50
Pendomer 020 3603 5220
Sale of Polish operations
1. Details of the transaction
The Transactions constitute the disposal by the Group of its 100 per cent interest in Media Regionalne by way of share sales to, respectively, Polskapresse and Multimedia, for a total consideration, on a debt and cash free basis, of PLN 17 million (€4 million), subject to customary adjustments for net cash, minority interests and working capital as at completion of the Media Regionalne Transaction. Based on Media Regionalne's current position, which includes a substantial cash balance which is already reflected on Mecom's consolidated balance sheet, Mecom expects to receive total cash proceeds of approximately PLN 88 million (€21 million) following completion of the Media Regionalne Transaction.
2. Information regarding Media Regionalne
Media Regionalne publishes 9 regional daily newspapers, 2 paid weekly and 3 free weekly titles, with a combined readership of 2.8 million. It operates more than 50 websites, which attracted a combined total of more than 10 million unique users in January 2013. Media Regionalne also owns five print plants, which serve both the Company's own publishing needs as well as third party customers.
Media Regionalne generated revenue of €49.9 million in the twelve months ending 31st December 2012 (2011: €58.5 million), of which €1.6 million (2011: €1.9 million) was attributable to the operations of Radio GRA. The Company generated profit before tax and intercompany transactions of €0.3 million in 2012 and €0.2 million in 2011, with the companies constituting Radio GRA contributing profit before tax of €0.1 million and €0.2 million, respectively, to these totals. At 31st December 2012 Media Regionalne had gross assets of €51.7 million and net assets of €46.0 million.
3. Details of key individuals important to Media Regionalne
The individuals considered by Mecom to be important to Media Regionalne are as follows: (i) Joanna Pilcicka, Managing Director; and (ii) Roman Czarnuch, Vice-Managing Director and Chief Financial Officer.
4. Use of proceeds by the Group
Under the terms of Mecom's Amended Facilities Agreement, the Group is required to use the economic proceeds of the Transactions (i.e. the amount by which net debt is reduced) to prepay outstanding indebtedness under Mecom's loan facility.
In respect of that portion of the proceeds that is attributable to Media Regionalne's net cash, Mecom will use this in reducing amounts drawn under the Group's revolving credit facility.
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