UPDATE 1-Ailing broadcaster CME looks to Time Warner for capital boost
PRAGUE Oct 30 (Reuters) - Lossmaking broadcaster Central European Media Enterprises (CME) said on Wednesday it needed more money to stay afloat and was trying to secure extra financing from its main shareholder, Time Warner .
CME, which has been battling a slumping advertising market in central and eastern Europe, said it no longer expected to make a core profit this year, blaming a weaker outlook in its Czech and Slovak markets.
There was no certainty that the preliminary discussions with Time Warner on a possible capital transaction, including debt, would come to anything, CME said in its third-quarter earnings statement. It forecast negative free cash flow of $140 million for full-year 2013.
"If we are unable to secure additional financing, we will be unable to meet our debt service obligations and generally fund our operations sometime within the next twelve months," CME said.
"Due to the level of negative free cash flow anticipated for 2013, we will need additional capital and we are currently evaluating all options available to us, including debt and equity financings, asset sales and the renegotiation of payment obligations with a number of major suppliers," it added.
CME had net debt of $795 million at the end of June. CME, which operates television stations in six central and eastern European markets, cut its forecast for full-year 2013 revenue to between $640-$650 million and also said it expected a loss of between $30-40 million on the level of operating income before depreciation and amortisation (OIBDA).
It previously expected 2013 revenue of $700-$720 million and positive OIBDA of $50-$70 million.
The broadcaster, founded by billionaire Ronald Lauder in 1994, reported revenue of $135.8 million in the third quarter, versus $130.1 million seen in a Reuters poll, and an OIBDA loss of $32.4 million, wider than an $8.8 million loss expected.
CME already cut its outlook following the second quarter after TV advertisers balked at higher prices, especially in its largest market, the Czech Republic.