form8k.htm
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
PURSUANT
TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date
of Report (date of earliest event reported) February 18, 2010
CENTRAL
EUROPEAN MEDIA ENTERPRISES LTD.
(Exact
name of registrant as specified in its charter)
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BERMUDA
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0-24796
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98-0438382
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(State
or other jurisdiction of incorporation and organisation)
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(Commission
File Number)
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(IRS
Employer Identification No.)
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Mintflower
Place, 4th floor
Par-La-Ville
Rd, Hamilton, Bermuda
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HM
08
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(Address
of principal executive offices)
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(Zip
Code)
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Registrant's
telephone number, including area code: (441) 296-1431
Not
Applicable
(Former
name or former address, if changed since last report)
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see General Instruction A.2. below):
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
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Item
1.01
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Entry
into a Material Definitive
Agreement
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On
February 18, 2010, Central European Media Enterprises Ltd. and its wholly owned
subsidiary CME Media Enterprises B.V. (“CME BV”) entered into a Deed relating to
the sale and purchase of certain media interests in Bulgaria (the “Agreement”)
with News Corporation and News Netherlands B.V. Under the Agreement, CME BV or a
wholly owned subsidiary of CME BV will acquire (i) 100% of Balkan News
Corporation EAD (“BNC”), which owns a 74% interest in Radio Company C.J. OOD
(“RCJ”) and a 23% interest in Balkan Media Group AD, and (ii) 100% of TV Europe
B.V., which owns 100% of Triada Communications EOOD (“Triada”). BNC and Triada
operate and broadcast the bTV, bTV Cinema and bTV Comedy television channels and
RCJ operates several radio stations in Bulgaria (the “bTV
Group”). Total cash consideration for the transaction is US$ 400
million on a cash-free and debt-free basis and is subject to an adjustment in
the event that actual working capital at completion differs from an agreed level
of target working capital. Completion is subject to the approval of the
Bulgarian Commission for the Protection of Competition and other customary
closing conditions and is expected to occur in the second quarter of this
year.
Based
on the unaudited management accounts of the bTV Group for the fiscal year ended
June 30, 2009, it generated revenues of BGN 150.6 million (approximately US$
105.2 million) and EBITDA of BGN 64.5 million (approximately US$ 45.1 million),
as adjusted for certain contractual obligations that will cease upon the
acquisition. The accounts of BNC are prepared in accordance with
IFRS.
On
February 18, 2010, CME BV entered into a sale and purchase agreement (“SPA”)
with Top Tone Media Holdings Limited (“Top Tone Holdings”) and Krassimir Guergov
to restructure the operations of its Bulgarian terrestrial channel Pro.BG and
cable channel Ring.BG (the “Pro.BG business”). Mr. Guergov is entitled by
contract to the economic benefits that accrue to Top Tone
Holdings. Under the SPA, Top Tone Holdings will transfer to CME BV
its 20% interest in each of Top Tone Media S.A. and Zopal S.A., which together
own the Pro.BG business, in consideration of (i) receiving a 6% interest in a
subsidiary to be formed to acquire the bTV Group in the transaction described
above and (ii) the termination of the existing agreements with Top Tone Holdings
and Krassimir Guergov in respect of the Pro.BG business. It is expected that Mr.
Guergov, who has provided expertise and advice for the Pro.BG business, will
continue to provide advice following the completion of these
transactions.
In
addition, at closing Top Tone Holdings or a party designated by it will enter
into an agreement with CME BV pursuant to which it will have the right to
acquire up to an additional 4% in the newly formed entity (i) for a one-year
period from closing based on the price paid by CME BV for the bTV Group for the
proportionate interest to be acquired by Top Tone Holdings and (ii) from the
first anniversary of the closing until the third anniversary of the closing, at
a price determined by an independent valuation. From the third anniversary of
the closing, Top Tone Holdings or a party designated by it will have the right
to put its entire interest to CME BV and CME BV will have the right to call from
Top Tone Holdings its entire interest, in each case at a price determined by an
independent valuation. The closing of this transaction is expected to occur at
the same time as, and is subject to, the completion of the acquisition of the
bTV Group described above.
Signatures
Pursuant
to the requirements of the Securities Exchange Act of 1934, we have duly caused
this report to be signed on our behalf by the undersigned thereunto duly
authorized.
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Date:
February 18, 2010
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/s/ David
Sturgeon
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David
Sturgeon
Deputy
Chief Financial Officer
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