Media News - Tuesday, January 13, 2009

Mecom staves off bank breach by EUR 152m sale of German unit

Mecom, the UK-based European newspaper owner, has sold its titles in Germany to one of that country's oldest publishers for EUR 152m. The company, which is chaired by David Montgomery, former chief executive of the Mirror Group, is burdened with net debt of about EUR 650m and has been in danger of breaching its banking covenants. It should, however, scrape through the next test of those levels following the proposed sale, according to one analyst. M. DuMont Schauberg, which is based in Cologne, Monday bought the Berliner Zeitung, Hamburger Morgenpost and several other titles from Mecom at a price that has fallen in recent weeks from about EUR 165m. The deal was signed in Germany Monday night. The titles being sold contributed about EUR 20m of Mecom's estimated EUR 163m of earnings before interest, tax, depreciation and amortisation last year. Mecom has also been involved in informal discussions over the sale of its businesses in Norway and Poland, which analysts have estimated to be worth between EUR 400m and EUR 460m in total. The company has other newspaper and magazine titles in Denmark, which are loss-making, and the Netherlands, where it has invested heavily in restructuring the business. (Financial Times)

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