EM.TV Given Extension For Loan Repayment
German entertainment company EM.TV & Merchandising AG is close to paying off half of its so-called "Junior loan," allowing its previously announced sale intention of half of the Muppets stake to continue. The consortium banks of EM.TV have decided to extend the term for repayment of the remainder of the "Junior loan" by three months, until the end of April 2003. The "Junior loan" financed EM.TVs 50% acquisition of its interest in the Junior TV joint venture with the failed Kirch Media Group. Because of this extension, EM.TV is able to conclude the ongoing negotiations of the sale of the subsidiary Jim Henson Company (JHC) in a controlled way. In December 2002, the company announced that it had signed a letter of intent to sell 49.9% of JHC to an investment group led by Dean Valentine, together with Europlay Capital Advisors. Negotiations currently continue between EM.TV and Dean Valentine's group, as well as with other interested parties. EM.TV owed EUR 64 million toward the Junior loan at the end of 2002. After an initial payment of EUR 15 million at the beginning of 2003, an additional amount of EUR 24 million was paid at the end of January 2003. This second payment was made possible by cash proceeds received from a transaction with Sesame Workshop, who made a lump-sum prepayment to the EM.TV subsidiary Jim Henson amounting to approximately US$37 million, fulfilling an obligation from an extensive purchase, license and cooperation agreement entered into in December 2000. The residual debt of the Junior loan is now EUR 25 million. EM.TV hopes to complete the sale of JHC by the end of February 2003, thereby allowing the company to repay the Junior loan completely, as well as to secure the liquidity of the EM.TV group.