Est Media must sell its 51% stake in Sziget, the company that organises the annual Sziget Festival, after it decided not to proceed with a planned issue of convertible bonds in a private placement, due to weak demand. The company needed the proceeds to swiftly refinance a Ft 860 million debt maturing later this month.
Est Media will offer its stake in Sziget in two rounds, Napi Gazdaság reported. The first round will only succeed if bids exceed Ft 2 billion. In the second round, the minimum bid will be Ft 800 million.
Markets reacted to the news with a hard sell-off as Est Media shares tumbled 13%.
The company without its crown jewel Sziget stake will dwindle to the size of a garage firm where it started from, publishing free programme guides, but at least without debts, Napi Gazdaság noted. The company’s annual revenue will be around Ft 1 billion a year. The most likely scenario is that owners of Sziget will buy Est Media stakes, the business daily opined.