Metromedia Sells Russian Assets
NEW YORK -- Metromedia International Group, Inc. (the "Company") (OTCBB:MTRM), the owner of interests in various communications and media businesses in Eastern Europe, the Commonwealth of Independent States and other emerging markets, today announced that it executed a non-binding letter of intent with Adamant Advisory Services, a British Virgin Islands company ("Adamant"), to exchange the Company's ownership interest in certain of its business units in Russia for approximately $58.6 million, face value, of the Company's 10 1/2 % Senior Discount Notes (the "Senior Notes"). Currently, $210.6 million in face value, excluding accrued interest, is outstanding on the Senior Notes (inclusive of the Senior Notes associated with the Adamant transaction). As part of the transaction, the Company will convey to Adamant its ownership interests in Comstar (a Moscow based fixed-line telephony operator), Kosmos TV (a Moscow based cable television operator), and the Company's Russian radio assets. In addition to conveying the Senior Notes to the Company, Adamant will pay US$5 million in cash and also release the Company of its obligation to pay interest accrued on the Senior Notes (the current obligation is $3 million). Final closure of the exchange is conditioned on execution of definitive agreements and receipt of certain third party approvals, including those by Russian regulatory authorities, all of which are expected within weeks. In making this announcement, Mark Hauf, Chairman, President and Chief Executive Officer of the Company, commented, "This transaction relieves a significant amount of financial pressure that the Company faces. It is a major step towards our goal of placing the Company on a sound and stable financial footing." With the conclusion of this transaction, approximately $152 million, face value, of the Company's Senior Notes will remain outstanding. The Company also announced today that it did not pay the $11.1 million interest due on March 31, 2003 for the Senior Notes that currently remain outstanding (inclusive of the Senior Notes associated with the Adamant transaction). The Company has a 30-day grace period for making the interest payment under the indenture governing the Senior Notes. Further, the Company announced that it will not declare a dividend on its 7 1/4% cumulative convertible preferred stock for the quarterly dividend period ending on March 15, 2003. With respect to these decisions, Mr. Hauf commented, "The Company faces liquidity problems that would only be aggravated by these interest and dividend payments. We continue active engagement with our key financial stakeholders on debt restructuring measures in an effort to resolve our liquidity issues in a fashion that best preserves value for all interested parties." Metromedia International Group Inc.