Sydney - Wednesday - October 18: (RWE Aust Business News) - Publishing and Broadcasting Ltd (ASX:PBL) has entered into binding agreements to implement a recapitalisation of certain of its media interests, including ACP Magazines, Nine Network (including its interest in Sky News), its 50pc interest in ninemsn and its 41pc shareholding in carsales.com.au. These media businesses are being transferred to a new company, PBL Media, in which PBL and CVC Asia Pacific will each hold a 50pc economic interest. PBL will receive net cash proceeds of $4.542 billion. To fund the payment to PBL, PBL Media has underwritten financing from UBS for new debt of $3.75 billion non-recourse to PBL and CVC. Additionally, CVC will invest $982 million to acquire convertible notes in PBL Media. Once the new media laws become effective and subject to FIRB approval at that time, CVC's convertible notes will convert to 50pc of the ordinary shares in PBL Media. Until that time, PBL will continue to control the Nine Network. It will also continue to control Ninemsn in its joint venture with Microsoft. John Alexander will act as executive chairman of PBL Media, and will continue as chief executive of PBL. Ian Law will be chief executive of PBL Media and Pat O'Sullivan will be chief financial officer. The transaction is conditional upon any regulatory or other approvals that may be required by PBL. Completion is expected to occur in early 2007. "Over the last 12 months we've strongly indicated our desire to invest in new opportunities," executive chairman James Packer said. "The restructure will provide the capital and flexibility necessary for the company to achieve its ambition to expand its international gaming interests. "A clear benefit of the restructure will be the quarantining of the gaming and media businesses, with the latter's use of non-recourse debt protecting PBL shareholders from additional capital risk incurred in the funding of any expansion through acquisition. "For PBL it releases cash at a time when there is a land-grab underway for gaming and entertainment assets around the world." PBL shares were in a trading halt and last traded at $19.85.
PBL Price at posting:
0.0¢ Sentiment: Buy Disclosure: Held
