Trinidadian media group raises capital to fuel regional expansion
Caribbean Communications Network Limited (CCN) has raised a total of TT$91 million from existing shareholders to facilitate the Company's continued growth in the Caribbean media and communications industry. In a press release the Company announced that this equity capital will fund future expansion in all three segments of CCN's operations, including broadcasting, newspapers and CCN Galaxy Caribbean, the Company's direct-to-home satellite delivered television service. The funding will come from the Cisneros Group of Companies, the leading operator of the DirecTV franchises in Latin America. The Cisneros Group will provide funds directly and through Partners (IAMP) a fund jointly managed by the Cisneros Group and Hicks, Muse, Tate and Furst, the largest financial investor in broadcast properties in the world. "CCN is excited to have attracted additional capital from two prominent investors in and operators of media properties," said Kenneth Gordon, Chairman of CCN. "These investments will allow us to pursue the goals and objectives of CCN's management and Board of Directors, as outlined in our 1998 Annual Report." These objectives include the expansion of television broadcasting through the establishment of a Regional network and attracting a significant third party investor in CCN Galaxy Caribbean in order to reduce the debt servicing cost to the Company associated with funding 100% of DirecTV's growth. As part of the transactions, CCN will incorporate TV6 as a Company. Shares in this Company will be transferred to their partner, up to a maximum of 49%, for the consideration of TT$73 million. The subsidiary, which will initially be owned 86% by CCN, will pursue acquisitions of broadcast assets throughout the English speaking Caribbean. IAMP, which will initially invest TT$12 million in the venture, has committed a total of TT$73 million to fund future acquisitions in the radio and television broadcast and outdoor advertising sectors and to fund the creation of the Caribbean Television Network. Ben Moody, Managing Director of IAMP said, "IAMP is pleased to have the opportunity to support the vision and proven management skills of the CCN team that has successfully assisted several Caribbean media houses over the past twenty-five years." In addition, the Cisneros Group will purchase 51% of CCN Galaxy Caribbean, its DirecTV operation, from CCN for approximately TT$12 million. The transaction is designed to reflect CCN's significant ongoing enthusiasm for the DirecTV service, while alleviating the financial pressures of funding 100% of the early growth of this capital-intensive business. The transaction will also allow CCN to shift more than half of its existing indebtedness into an associated company. CCN will continue to manage CCN Galaxy Caribbean, with assistance from the Cisneros Group, also a 20% owner of Galaxy Latin America, which franchises companies to distribute satellite programming in the Caribbean and Latin America. "The involvement of the Cisneros Group will allow us to acquire American channels which will include the US networks and their movie channels and accelerate the subscriber growth of Galaxy Caribbean and to take advantage of Cisneros' existing Galaxy franchise ownership, including the Galaxy systems in Venezuela, Brazil, Puerto Rico and several other countries." said Bernard Pantin, General Manager of Galaxy Caribbean. In addition, the Cisneros Group will invest TT$6 million in newly issued CCN shares, bringing their ownership to 25% of the company's issued shares. These transactions will leave CCN debt free. Craig Reynald, Chief Executive Officer of CCN, said, "CCN and its Board of Directors are honoured that the Cisneros Group and IAMP have illustrated their confidence in the Company and its business strategy through these three transactions. As a staunch supporter of freedom of expression and understanding, CCN has raised significant capital resources while maintaining control of our media assets in the Caribbean. We believe these events make CCN the best positioned Company to be part of the future in the media and communications industry in the Caribbean."
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