Mediapro, the Spanish production group and media-rights agency, is close to securing a €55m ($61.7m) credit facility, plus a similar contribution from its shareholders, it has been reported.
The credit facility is expected to be granted by Deutsche Bank, which would syndicate the facility along with investment banks Citigroup and Goldman Sachs, reports Spain’s El Confidencial newspaper.
It is claimed that, in total, Mediapro’s parent company Imagina would receive about €120m to weather the storm caused by the Covid-19 pandemic.
The credit facility is said to be conditional on a €55m contribution from shareholders through an increase in capital. The contributions from shareholders are expected to be provided proportionately based on the number of shares held.
SportBusiness Media understands that full details of the funding plans are still to be finalised, with Mediapro expected to make an announcement upon their completion.
Chinese private equity firm Orient Hontai Capital acquired a 53.5-per-cent stake in Imagina in 2018 and is therefore in line to contribute €29.4m, according to El Confidencial. Advertising giant WPP holds a 22.5-per-cent stake, while Jaume Roures, Mediapro’s founding partner, and Josep María Benet, Imagina’s chairman and chief executive, hold 12-per-cent each.
It was recently reported in Spain that Mediapro had applied for a €125m loan. The loan was to be guaranteed by Official Credit Institute (ICO), the state-owned bank in Spain.
Mediapro’s business has, like others, been adversely affected by the pandemic, which has postponed or cancelled sporting events across the globe. The production sector was particularly hit by the blanket postponement of live sports events.
Mediapro was preparing the ground for an initial public offering (IPO) before the Covid-19 pandemic struck.
In response to the coronavirus crisis, Mediapro filed for a Temporary Employment Regulation File (ERTE) that affected as many as 1,200 of its employees in Spain. Board members also took a pay cut, as did higher earners.
An ERTE allows Spanish businesses to suspend employment contracts or reduce staff hours indefinitely, while applying for the state to pay a portion of employee wages. Although these measures only affected staff in Spain, Mediapro said at the time that it intended to impose equivalent measures in accordance with the laws of the various countries in which it has offices.
In March, Mediapro reported a drop in annual revenues but a €2m uplift in earnings before interest, taxes, depreciation and amortisation (ebitda). The group announced ebitda of €224m for 2019, up from €222m in 2018, as turnover fell from €1.97bn to €1.82bn. Company debt stood at €727m at the end of 2019.