Broadcaster CME prices share offer at 13 pct discount

PRAGUE Fri May 3, 2013 6:55am EDT

PRAGUE May 3 (Reuters) - Central European Media Enterprises (CME) priced a public share offer at a 13 percent discount on Friday, sending its shares to a record low as it tries to cut debt while advertising revenue sinks.

The broadcaster, almost half owned by U.S. media group Time Warner, priced 54.4 million shares at $2.75 per share before discounts and commissions, below the closing price of $3.16 on the Nasdaq on Thursday.

The operator of television stations in six central and eastern European will raise nearly $149.7 million gross through the offer, which closes on May 8. Underwriters have an option to purchase an additional 5.4 million shares, CME said.

CME shares fell as much as 16 percent in Prague, hitting a record low of 56.90 crowns ($2.90) following the pricing.

The company announced the share offer on Monday when it reported a loss and an 18 percent fall in revenue in the first-quarter, hit by lower advertising income as local economies remain weak. Its debt was $1.07 billion at the end of March.

CME's main shareholder Time Warner committed to taking up 49.9 percent of the offering to maintain its stake at that level.

CME also plans to sell $200 million of convertible class B preferred stock to Time Warner.

CME will use $300 million of the net proceeds of both deals to buy back a portion of 11.625 percent senior notes that are due in 2016.

The company said on Monday revenue was likely to decline to $750-770 million this year from $772.1 million in 2012. Operating income before depreciation and amortisation (OIBDA) was likely to fall to $100-120 million from $125.4 million.

Time Warner bought a 31 percent stake in CME in 2009 and has gradually raised its holding in a company founded by billionaire Ronald Lauder in 1994. Last year it gave CME a cash injection.

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