News Corporation today announced it has reached an agreement with Sky Deutschland AG (“Sky Deutschland”) and its new bank syndicate to support both a new financing structure and the issuance of €438 million of new equity.
The new bank financing, which will be guaranteed by News Corporation, will replace Sky Deutschland’s current bank debt facilities. Additionally, News Corporation will guarantee certain rights payments associated with Sky Deutschland’s Bundesliga broadcasting license and support the raising of additional funds of €438 million (which includes the outstanding €144 million of equity under the capital measures announced by Sky Deutschland on February 2, 2012) to support Sky Deutschland on the continuing execution of its strategy.
“We have always believed in Sky Deutschland’s ability to transform the pay TV experience in Germany and Austria and this new financing structure further validates that longstanding commitment,” said Chase Carey, President and Chief Operating Officer, News Corporation. “News Corporation’s continued investment underscores the value we see in Sky Deutschland and the significant market opportunities it faces, and reflects our confidence in its management team and their strategies for growth.”
Under the new financing structure, Sky Deutschland’s existing bank debt facilities will be repaid in full and be replaced by a new €300 million five-year bank credit facility. News Corporation has committed to provide a guarantee to Sky Deutschland’s lending banks and to act as guarantor to the German Football League (DFL) for Sky Deutschland’s new Bundesliga broadcasting license for the 2013/14 to 2016/17 seasons in an amount of up to 50 percent of the license fee per season. In addition, News Corporation has agreed to extend the maturity of existing shareholder loans of €106 million plus accrued interest.The €438 million of new equity includes a private placement today of 77.9 million new registered shares in Sky Deutschland issued to News Corporation at a price of €4.46 per new share for an aggregate price of €347.4 million. On registration, News Corporation’s stake in Sky Deutschland will increase from 49.9 percent to 54.5 percent.