TVN SA, Poland’s second-largest television network, may use the cash from its Onet.pl sale to buy back bonds before a November deadline and may refinance remaining notes depending on market conditions.
“As we said before, the majority of proceeds from the sale of Onet will be used to buy back bonds,” Tomasz Pozniak, the head of the company’s investor relations, said in a phone interview on Jan. 25. “Currently it’s not beneficial to buy back bonds as the price is comparable to the early redemption price we will have in November. If the price was lower than the November call, then it would be in our benefit.”
In November TVN sold 75 percent of Poland’s largest web portal Onet.pl to Vidalia Investments Sp. z o.o., a unit of Ringier Axel Springer Media AG, for 956.3 million zloty ($306 million) in cash. The broadcaster swapped the remaining 25 percent in Onet for a 25 percent stake in Vidalia.
The broadcaster, which in 2011 posted its first annual loss since its stock started trading in Warsaw in 2004, is selling businesses as the economic slowdown hurts the ad market. Last year it also merged its pay-TV unit with France’s Canal Plus.
The company’s outstanding bonds include 593 million euros of 2017 securities paying 10.75 percent and 175 million euros of 2018 notes paying 7.875 percent, according to data compiled by Bloomberg. Pozniak says TVN is considering refinancing the current debt.
“It’s a good time” for refinancing “and we are looking at such an opportunity as well,” he said. “Our average cost of debt is at about 10 percent, while in this market it is possible to get somewhere around 7 percent.”
The company is yet to make a decision on any refinancing and according to Pozniak, the current market could “absorb” a bond sale of 500 million euros to 600 million euros.
“The market believes that the high-yield bond market should be strong at least until mid 2013,” he said.