Viaplayhas sold its UK business back toPremier Sportsand revealed the renegotiation of credit arrangements and the proposed injection of new equity into the Group as it battles the economic downturn.
In a statement partnering this mornings eventual results publication, CEO Jrgen Madsen Lindemann revealed that Viaplays non-core UK business is being sold back to Premier Sports just a year after it was acquired for 30M ($38M), subject to regulatory approval.
The UK business mainly incorporated the pay-TV broadcasters sports rights contracts including Spains La Liga soccer and channels along with a few technical staff who will return to Premier.
La Liga soccerFran Santiago/Getty Images
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Lindemann said the route to profitability for operations in the UK, Baltics and Poland was not clear or realistic, and the latter two territories will be exited by summer 2025.
Viaplay expects to report higher full year losses for these operations than previously thought, due to the range of commercial initiatives that we have not been able to initiate now that we are exiting the markets.
Viaplay has also pulled streaming from the U.S.
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Lindemann, meanwhile, unveiled the renegotiation of our credit arrangements and the proposed injection of new equity into the Group ashis new-look teamdesperately seeks to get a handle on Viaplays finances.
Equity will be raised via a 4B SEK ($380M) capital injection supported by shareholders including Canal+ by means of a $300M directed share issue and $80M rights issue, along with a $190M writedown of existing debt obligations, of which $47M will be converted into equity.
Viaplays Q3 results showed a year-on-year sales increase of 7.4% to $434M but an operating loss of $51M, while net debt was at $318M.
Lindemann said Viaplay is continuing to feel the pressure due to higher previously committed original content costs, built-in sports rights inflation and adverse currency effects.
We understand the current state, and future potential, of the business, our products, and our people, he added.
The energy, enthusiasm, and enterprise of our teams, especially in these challenging times, is fantastic to see.
We have much to achieve together and the proposed recapitalisation of the business is a necessary part of resetting the Group for a much more sustainable future, where our attention and resources are focused on those markets where we can compete for the long term, and where our products are relevant, popular and generate healthy returns.
Lindemann took overfollowing the departure of Anders Jensenover the summer and changed the companys course immediately, focusing on core operations and dumping the outfits scripted ambitions that had previously seen one original commissioned per week.
The company has sincelaid off aroundone third of its staff amidst a major strategic review, which has seen financial targets revised.
