Constantin makes progress in restructuring efforts

German media company Constantin Medien has said it has taken an important first step in its restructuring through an agreement with partner Stella Finanz.

Constantin and Stella have agreed on the terms of the restitution of a loan with a nominal value of €12.25m ($14.6m) and CHF26m (€22.45m/$26.7m) granted by Stella, as well as the termination of the legal disputes between both companies.

The loan including all accrued interests will be settled in eight million shares in Constantin subsidiary Highlight Communications, which had been pledged to Stella Finanz. In return, Stella will release the remaining pledged 16.75 million shares, so that overall 20.6 million shares in Highlight Communications are at the free disposal of Constantin.

As a result of the execution of the agreement with Stella Finanz, Constantin’s shareholding in Highlight Communications will be reduced to around 32.7 per cent in the near future.

Constantin said its management board, together with a “renowned German financial institution” and several investors, is preparing a complete refinancing of the €65m corporate bond which will expire in April 2018.

It added that the management board and supervisory board are targeting a “short-term pacification” of the current legal disputes in Germany and Switzerland in order to focus resources on operational business activities.

Olaf Schröder, chief executive of Constantin Medien, said: “The agreement now reached is a first important step in securing the financing structure of our group. Currently, we are working at high pressure on the refinancing of the corporate bond to be able to entirely direct our focus towards the operational activities and the strategic further development of our company.”

Constantin’s supervisory board last month moved to revoke the appointment of chief executive Fred Kogel with immediate effect, suspending him from all duties amid ongoing upheaval at the firm. The supervisory board appointed management board member Schröder, responsible for the firm’s sports division and chief executive of sports broadcaster Sport1, as chief executive of the management board.

Major shareholders Dieter Hahn and Bernhard Burgener have been in a long-running dispute over the future strategic direction of the firm. In June, Constantin Medien launched a bidding process with the aim of selling all its shares in Sport1 and the Sport1 Media advertising sales agency. The shares are held by the media company’s wholly-owned subsidiary, Constantin Sport Holding.

Constantin operates free-to-air channel Sport1 and pay-television channels Sport1 Plus and Sport1 US, as well as the Team Marketing agency. Team is controlled by Highlight Communications and holds a long-term agreement with Uefa, European football's governing body, under which it serves as the exclusive agent for the global marketing of commercial rights relating to the Champions League, Europa League and Super Cup club competitions.