Willkie Advises Time Warner in $542 Million Refinancing Deal with CME

March 3, 2014

Central European Media Enterprises Ltd. announces refinancing of 2016 Notes with proceeds from a rights offering and financing provided by Time Warner.

On February 28, Central European Media Enterprises Ltd. announced that it has entered into an agreement with Willkie client Time Warner Inc. and one of its affiliates to finance the redemption of CME’s  €272,972,000 aggregate principal amount of 11.625% senior notes due 2016.  The transaction is valued at $542 million. CME also filed a rights offering registration statement.

In connection with the rights offering, CME shareholders holding Class A Common Stock and Preferred Stock (allocated on an as-converted basis) will receive non-transferrable rights to purchase in the aggregate 3,391,403 units at a subscription price of $100.00 per unit, with each unit consisting of a note and a warrant to purchase common stock. Time Warner, CME’s largest shareholder, agreed to purchase all units in the rights offering not subscribed for by other shareholders.  In addition, Time Warner will purchase 576,968 units from CME in a separate private placement transaction to close in conjunction with the rights offering.

CME expects to raise gross proceeds from the rights offering and the purchase of units by Time Warner of approximately $396.8 million and will issue 84 million unit warrants in the rights offering and the Time Warner private placement.  In addition, Time Warner will provide to CME a $115 million senior secured revolving credit facility.

CME is a media and entertainment company operating businesses in six Central and Eastern European markets with an aggregate population of approximately 50 million people.  Willkie previously represented Time Warner in its equity investments in Central European Media Enterprises in 2013, 2012, 2011 and 2009.

The current deal was handled by partners William Gump, Thomas Mark, William Hiller, Joseph Baio and Christopher Peters, and associates Andrew Fedder, Abraham Kwon, Christopher Giorgione, Sean Zoltek and Meredith Levy.