Metromedia International Group Announces Update On Asset Sale and Cash Repatriation Strategies; Company Receives Dividend Payments from PeterStar and SAC
NEW YORK--(BUSINESS WIRE)--June 27, 2002--Metromedia International Group, Inc. (the Company) (AMEX:MMG), the owner of various interests in communications business ventures in Eastern Europe, the Commonwealth of Independent States and other emerging markets, today announced that in connection with a change in its strategy to sell certain assets it has hired United Financial Group, a Russian based investment advisor, to assist the Company in evaluating certain offers that it has received for its Russian and Georgian telephony assets.
The Company also announced that since May 15th, 2002 it has repatriated approximately $8.1 million of net cash dividends from PeterStar, its competitive local exchange carrier in St. Petersburg, and SAC, which owns Radio 7 in Moscow. These dividend payments reflect the 2001 financial performance of the two businesses. Accordingly, the Company does not anticipate additional dividend payments from these two businesses until the financial results for the 2002 fiscal year of these businesses are presented and approved by their respective Boards of Directors.
Mr. Brazell commented, "As we have previously communicated, since the Company is a holding company, the repatriation of cash from our business ventures is integral to improving liquidity and restructuring the overall operations of the Company. Further, I am pleased to report that our cash balance at the headquarters level at June 26, 2002 was approximately $18.1 million, which includes these dividend distributions."
The Company had previously indicated that selling non-core assets was a goal of the Company to help improve liquidity and narrow the focus of its business. This strategy previously included restructuring the Company to concentrate on its core telephony assets. However, given the rapidly changing dynamics of the Russian telecommunications industry, including mergers and consolidations among the largest telecommunications firms in Russia, and the Company's goal of maximizing shareholder value, the Company has re-examined its core and non-core assets. The Company has determined that all assets, including telephony, will be considered for possible sale.
As a result of this revised strategy, the Company has held preliminary discussions with certain Russian companies regarding merging its Russian telephony holdings, so far without substantial progress toward a transaction. Additionally, the Company has recently received unsolicited inquiries about sale of its Russia and Georgian telephony assets and has engaged United Financial Group to assist it in evaluating these offers. The Company does not anticipate consummating any major telephony asset sales for at least the next nine to 18 months.
"Due to the rapidly changing Russian telecommunications industry and our goal of maximizing value to our shareholders to the best of our abilities, we believe that the sale of our telephony assets will help us meet our objectives most effectively for the long term," said Mr. Brazell. "For the short-term, we have made progress in improving our liquidity through our cash repatriation strategies and the sale of Alma -TV. This improved liquidity puts us in a better position to seek the maximum value for our assets. We hope to further improve our short term liquidity through additional asset sales in the near future."
Mr. Brazell continued, "While our recent initiatives have alleviated some short term liquidity pressure, we still have a lot of work ahead of us to improve the long term outlook for our company. We still need to execute further assets sales, continue to implement our cash repatriation strategies and improve the capital structure of the Company by restructuring our indebtedness." |
