Sky Deutschland E340m injection

Sky Deutschland, the struggling German satellite broadcaster, has warned on profits and announced a refinancing offer of shares of at least E340 million, backed by News Corp, which owns 45 per cent of the group’s equity.
The money will be raised from a combination of a rights issue and a loan or convertible bond “backstopped” by News Corp, which has said it will take up shares to the point where it becomes a 49.9 per cent shareholder, but no further.
If other investors do not follow suit, leaving Sky Deutschland short of its total, News Corp will lend the rest of the money either in the form of a convertible bond or as an inter-company loan. The money will be used to invest in such additional services as HD channels and marketing personal video recorders.
In a statement that warned of earnings below expectations, the company said that the full-year 2010 loss before interest, tax, depreciation and amortisation would be “significantly” greater than the previously indicated level of E130 million-E170 million.
It blamed “slower than expected subscriber development and increased investment in key initiatives”. It said 2011 EBITDA would be “significantly better” than 2010, but would still remain negative, compared with previously announced guidance that it would break even in the final quarter of 2011. No new breakeven target was announced.