Radio One was not able to include new money to increase its stake in TV One in the difficult refinancing it finally got done last year. Even so, the public company has still managed to increase its percentage ownership of the privately-held cable TV network.
It was announced Thursday (3/3) that TV One completed a private debt offering of $119 million on February 25th. The five-year financing at 10% annual interest was obtained from funds managed by Canyon Capital Advisors LLC. $82.4 million of the proceeds were used by TV One to repurchase 15.4% of its equity interests from certain financial investors and 2% of the outstanding equity that was held by TV One management. That was about half of the management holdings.
The effect of buying back those membership interests was that it increased Radio One’s equity stake from 36.8% to approximately 44.6%. In addition, TV One plans to use the remaining cash to buy back DirecTV’s 12.4% stake in the company. That will boost Radio One’s stake past 50% and allow it to consolidate TV One in its financial results.
The transaction valued TV One at $500 million on an enterprise basis and an equity value of $534 million, Radio One CFO Peter Thompson told analysts as the company reported its quarterly results.
For Q4 TV One had net revenues of $28.7 million, up 17.1% from a year earlier. EBITDA was $5.9 million after valuation expenses of $2 million, which was up 12.5% from Q4 of 2009.