CTC Media, Inc. Announces Receipt of Final Tranche of Purchase Price for Business Sale
13 February 2016 - 12:30AM
CTC Media, Inc. (the “Company”) (NASDAQ:CTCM) today announced
that it has received the final tranche of the purchase price for
its sale of 75% of the outstanding participation interests in its
subsidiary CTC Investments LLC to UTV-Management LLC. The sale
closed on December 23, 2015, and was intended to bring the
operating business into compliance with the foreign ownership
restrictions of the Russian Mass Media Law, which became effective
on January 1, 2016. CTC Media, Inc. received $150.5
million in cash at closing. An additional $50 million was held back
and was subject to adjustment based on the performance of the
business during the second half of 2015 and agreed indemnity
obligations. The Company has received $42.5 million of this
additional consideration in cash. The $7.5 million reduction in the
total purchase price reflects adjustments for several factors,
including identified underinvestment and deferred payments by the
group in the second half of 2015 compared with the agreed target
budget; a reduction in working capital compared with the agreed
target, reflecting the impairment of certain older programming
content; and indemnification in connection with the settlement of a
commercial litigation matter. The total consideration received in
connection with the sale was $193.1 million.
Werner Klatten, Chairman of the Special
Committee of the Board of CTC Media, Inc., commented:
“The management team achieved solid operating results in the second
half of 2015 in a challenging and deteriorating market environment
in Russia. Against this macroeconomic backdrop, this performance
helped to limit the reduction in the purchase price. We look
forward to completing the proposed merger transaction to return
value to stockholders as soon as possible.”
As previously announced, the Company’s
stockholders have approved a proposed merger transaction in which a
wholly owned subsidiary of the Company would merge with and into
the Company, with the Company surviving. Each holder of the
Company’s outstanding common stock as of the effective time of the
merger, other than Telcrest (the holder of 25% of the Company’s
outstanding shares), would be entitled to receive cash
consideration per share based on the aggregate amount of the
Company’s available cash at such time, net of cash reserves that
will be appropriate to be retained by the Company in light of
potential liabilities and obligations. The shares of common stock
held by Telcrest would remain outstanding following the merger, and
Telcrest would be the Company’s sole stockholder. Following the
merger, the Company would cease to be a publicly traded
company.
The Company has requested a license from the
Office of Foreign Assets Control of the U.S. Treasury Department to
authorize the proposed merger transaction; such license has not yet
been received. Assuming such license is granted and the necessary
closing conditions are satisfied, the Company expects that the
merger will close approximately one month following receipt of such
license. Given the uncertainty regarding the timing of receipt of
such license, if at all, the Company is unable to estimate at this
time the per share amount that would ultimately be returned to
stockholders in such merger, but currently expects that it would be
at the lower end of the upper half of the range approved by
stockholders of $1.77 to $2.19 per share. The Company will update
the market as and when the timing and final terms of such proposed
transaction are known.
About CTC Media, Inc. and CTC
Investments
CTC Media, Inc. is traded on NASDAQ under the
symbol ”CTCM”. CTC Media, Inc. holds a 25% interest in CTC
Investments.
CTC Investments is a leading Russian content
holding. The group manages four television channels in Russia (CTC,
Domashny, Che and CTC Love), as well as Channel 31 in Kazakhstan.
The international version of CTC Channel is available in North
America, Europe, Central Asia, Armenia, Georgia, Azerbaijan, the
Middle East and Kyrgyzstan. The international version of Peretz is
also available in Belarus and in Kyrgyzstan. CTC Investments also
owns several digital entertainment media assets including
videomore.ru, domashniy.ru, ctc.ru, chetv.ru and CarambaTV.
Caution Concerning Forward-Looking
Statements
Certain statements in this press release that
are not based on historical information are “forward-looking
statements” within the meaning of the Private Securities Litigation
Reform Act of 1995. Such forward-looking statements include, among
others, statements regarding the Company’s proposed merger
transaction to be consummated between the Company and a wholly
owned subsidiary of the Company; receipt of a license from the
Office of Foreign Assets Control of the U.S. Treasury Department
(“OFAC”) to authorize the proposed merger transaction; the timing
of the proposed merger transaction, if authorized by OFAC; and the
per share amount that would ultimately be returned to stockholders
as a result of the proposed merger transaction. These statements
reflect the Company’s current expectations concerning future
results and events. These forward-looking statements involve known
and unknown risks, uncertainties and other factors which may cause
actual results, performance or achievements to be materially
different from those expressed or implied by such forward-looking
statements.
The potential risks and uncertainties that could
cause actual future results to differ from those expressed or
implied by forward-looking statements include, among others, risks
associated with geopolitical events involving Russia and the other
countries in which the Company operates, including any potential
negative economic impact of such events; the effect of
international economic sanctions; and developments affecting the
cash requirements of the Company. These and other risks are
described in the “Risk Factors” section of CTC Media, Inc.’s
quarterly report on Form 10-Q filed with the SEC on November 9,
2015.
Other unknown or unpredictable factors could
have material adverse effects on CTC Media, Inc.’s future
results, performance or achievements. You are cautioned not to
place undue reliance on these forward-looking statements. CTC
Media, Inc. does not undertake any obligation to publicly
update or revise any forward-looking statements because of new
information, future events or otherwise.
For further information, please visit www.ctcmedia.ru or contact:
Hudson Sandler (European Media)
Andrew Hayes / Elena Garside +44 (0)20 7796 4133
CTC Media, Inc.
Investor Relations
+7 495 981 0740
ir@ctcmedia.ru
Media Relations
+7 (495) 785 63 47
pr@ctcmedia.ru
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