The Modern Times Group (MTG) has completed the sale of its 38% stake in Russian broadcasters CTC Media.
The Swedish-based free and pay TV group received a total of US$123 million for the stake, and the deal leaves MTG with no further interest in CTC or any of its operations.
The sale will result in MTG provisioning for a total negative non-cash impact of SEK1 billion in its second quarter financials, mostly due to accumulated currency changes and an adjustment to the fair value of the holding when compared with the value on the balance sheet as of the end of the first quarter.
MTG said it would use the cash proceeds of the deal to reduce its borrowing levels and fund the ongoing development of its business.
Earlier this week, CTC completed its previously announced cash-out merger with wholly owned subsidiary CTCM Merger Sub Inc. CTC Media was also delisted from the NASDAQ stock exchange after it failed to meet listing rules.
MTG’s sale of its Russian assets was force on it by changes to Russia’s media law that restricted foreign ownership of domestic media assets, placing a 20% ceiling on stakes owned by non-Russian companies.