Cable TV firm Tevel's operating deficit could come to $10 million at the end of its stay of liquidation proceedings on June 27, trustee and special manager Zvi Yochman from accounting firm Itzhak Swary estimates.
The trustee filed a report with Tel Aviv District Court today stating the Tevel group's monthly operating loss is expected to come to NIS 5 million.
Monthly revenue from subscriber fees is expected to come to NIS 51 million, while monthly content costs are likely to comes to NIS 33 million. Monthly wages, including of management and marketing staff, is expected to come to NIS 10 million. Monthly operating costs, management and general expenses are expected to come to NIS 15 million.
The estimates are based on the assumption that subscriber volume remains stable, but the company itself expects it will lose 16,000 subscribers to satellite TV firm YES in the coming two months.
When Tevel petitioned the court for stay of liquidation proceedings, the company presented a balanced budget. The operating deficit presented in the trustee's report stems from items not included in Tevel's petition, including shekel devaluation and decreased income.
Yochman believes that the volume of channels and content provided by Tevel in its basic package is too expensive by any standard. The trustee believes Tevel should cut the channels in the package, decreasing Tevel's costs, and transfer some of the removed channels from the basic package to for-pay content.
The report said Discount Investment Corporation (TASE: DISI ) has agreed to inject another NIS 200 million into Tevel, in which it owns 48.5%. Discount Investments also agreed to convert Tevel's NIS 140 million debt into shares, subject to its planned merger with Matav Cable Systems (Nasdaq:MATV) and Golden Channels, and granted that the other creditors, banks and suppliers, agree to the arrangement.
Tevel's debt came to NIS 3 billion at the end of 2001.
United Pan-Europe Communications (Nasdaq:UPCOY) told Yochman it would consider injecting money if it is presented with a long-term business plan that shareholders find acceptable. UPC owns 46.5% in Tevel.