UPDATE 1-CME stakes Ukraine future on Kolomoisky merger

* Tycoon injects $100 mln into broadcaster

* CME has right to sell him rest of Ukraine ops for $300 mln

* CME shares jump 8.5 pct

(Adds analyst, shares)

PRAGUE, July 3 (Reuters) - Debt-laden Central European Media
Enterprises (CETVsp.PR) (CETV.O) is teaming up with Ukrainian
tycoon Igor Kolomoisky in a broadcasting merger likely to make
or break the Prague-listed firm's future in the country.

Kolomoisky agreed to inject $100 million into CME's
loss-making Ukrainian TV channel, Studio 1+1, while merging it
with his own TET TV network, CME said in a statement on Friday.

CME shares rose sharply on the news, and analysts said it
would alleviate funding concerns surrounding the group, which
operates in seven central and eastern European countries
including the Czech Republic and Romania.

The tycoon, who holds a stake in CME and sits on the
company's board, will own 49 percent of the merged broadcast
assets and CME the remaining 51 percent, which it has the right
to sell on to Kolomoisky within a year for a further $300
million.

By 1003 GMT, shares in CME, which is 31 percent owned by
Time Warner (TWX.N), were up 8.5 percent against a European
media sector .SXMP up 0.5 percent.

"(Ukraine) is a negative cash flow country and therefore
their key task was to solve funding of these operations,"
brokerage Atlantik FT analyst Patrick Vyroubal said.

CME has bet heavily on Ukraine, its biggest market in terms
of population, in the past year by raising its stake in Studio
1+1 and predicting a doubling of revenue over the next three
years to $300 million.

However, the global economic downturn has hammered east
Europe, cutting sharply into advertising spending.

The company reported its "toughest quarter" ever in the
first three months of this year with a 37 percent drop in
revenue and warned declining ad sales would persist into next
year. [ID:nLT90650]

Vyroubal said that, if CME decided to exercise the put
option, it would exit Ukraine at a loss.

"But in the current global environment and decline in ad
spending, it is a potential good exit; therefore the market
views this as positive," he added.

Time Warner completed a $241.5 million investment in
Bermuda-registered CME last month.

(Reporting by Jason Hovet and Jana Mlcochova; Editing by Dan
Lalor, John Stonestreet)