Modern Times Group is set to receive US$123 million in cash for its 38% stake of Russian broadcaster CTC Media, after CTC announced the final terms of its cash-out merger.
The cash proceeds will be used to reduce MTG’s borrowing levels, and fund the “ongoing development of the group’s digital video entertainment businesses”, the company said.
“This marks the final step in our withdrawal from those entities impacted by the change in the Russian laws regarding foreign ownership of mass media. CTC Media had already taken the necessary steps to comply with the law and is now distributing the proceeds of that process,” said MTG president and CEO, Jørgen Madsen Lindemann (pictured).
“We have invested a total of US$123 million in Russia since 2001.The proceeds from the sale of our Russian and related assets, together with dividends received, is now expected to have amounted to US$768 million.”
CTC said on Friday that its previously announced cash-out merger transaction is expected to close by the middle of May and that the total amount available for distribution is expected to be US$239 million.
The company completed the sale of a 75% interest in its Russian operating businesses in December 2015 for US$193.5 million ahead of the 2016 introduction of an amendment to the Russian law on mass media that limits foreign ownership of media companies in Russia to 20%.
CTC’s stockholders previously approved a merger, which will see a wholly-owned subsidiary of CTC merge with the surviving company. In February the Office of Foreign Assets Control of the US Treasury Department issued a license authorising CTC Media to proceed with the merger transaction.