News guarantees €450m for Premiere

News Corp is underwriting a €450m financing cash call for Premiere. Premiere already owns 25% of the German pay-TV broadcaster. However, if Premiere’s other shareholders don’t match the News Corp investment then their stakes could be significantly reduced.

Premiere needed the cash to avoid being in breach of its own banking covenants, and to help finance a recovery plan designed to see it achieve profitability by 2011. It also has to come up with €1bn to finance the acquisition of the German Bundesliga soccer rights.

Premiere has had a nightmare year. In October it revealed that its declared subscriber numbers were false and had been heavily over-stated. The revelation led to the dismissal of its then CEO. News Corp is now very much in control at Premiere, headed by Mark Williams.