Antenna on review

Moody’s, the credit rating agency, yesterday said it had placed Antenna SA under review for a possible downgrade and warned that the media group’s full-year earnings before tax, interest, depreciation and amortization (EBITDA) are unlikely to meet expectations. Moody’s said the review would affect the media group’s senior implied rating which currently stands at Ba3, its senior unsecured issuer rating at Ba3, its $115 million of 9 percent unsecured notes due 2007 at Ba3, and its 150 million euros of 9.75 percent senior unsecured notes due 2008 at Ba3. The credit rating agency said the move was prompted by Antenna SA’s continued weak financial performance and the uncertainties in the European advertising industry. It said the media group’s EBITDA for the full year «is expected to be materially below Moody’s previous expectations» even though EBITDA is projected to more than double on a yearly basis. Antenna had reported a small gain in EBITDA after programming amortization in the third quarter of the year. Moody’s pointed to the increased competition in the Greek media sector and weak advertising market as two of the principal threats facing Antenna SA. On the plus side, the media group enjoys strong liquidity with an estimated 77.5 million euros in cash at the end of September. Lower capital spending and improved working capital have also helped to staunch the cash burn this year while a positive operating cash flow is predicted for next year. Antenna’s other asset is its strong position in the local media market. Moody’s downgraded Antenna SA in January this year from positive to stable following its deteriorating operating performance in 2001. Antenna SA comprises TV network Antenna TV, radio station Antenna FM and Daphne Communications, a publishing company with 11 magazines in its stable. The media group, which has American Depository Shares on the Nasdaq, is reported to be planning to go private with a group including its chairman, Minos Kyriakou, expected to make a tender

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