Press releases | Archive 2003
RBC TV moves ahead with the necessary financing in place
Moscow, March 5, 2003 - RBC TV is pleased to announce that it has secured the necessary funding in the amount of $15 million for its business TV project. The company is capitalized with $10 million in equity, which came from the parent company OAO RBC Information Systems, and $5 million in debt.
The debt portion of financing has a form of private placement attracted with the assistance of ABD Consulting primarily in Switzerland. RBC TV has reached an agreement with investors to increase the total amount of funding for the project to $18-20 million if necessary. The debt was raised by RBC TV and has no recourse to RBC Information Systems (RTS: RBCI; MICEX: RU14RBCI4001). This financing structure was designed and approved by the RBC Board in order to minimize commercial risks and protect the interests of existing shareholders.
According to conservative estimations of RBC management, the project will break even in two years, with the payback period of three years. The company expects profitability of the project to be in line with other business units. The business model of the project is based on advertising revenues. Potential advertisers of RBC TV include investment banks, insurance companies, banks, real estate firms, construction companies, airlines, car dealerships, telecommunication and business service providers as well as public companies. RBC will introduce this project in detail to the public and press at the beginning of April.
At present the company has hired the majority of staff for the TV project, including journalists, analysts and technical specialists. RBC TV will broadcast from a television center located on RBC premises with the total office space of more than 3,000 m2.
RBC TV is a wholly owned subsidiary of RBC Information Systems. This will allow the parent company to have full control of the project, use synergies with other RBC businesses and protect independent and objective editorial policy.
"Russia, with its one of the best performing equity market over the past three years, stable political climate and growing economy needs a TV channel totally dedicated to business, finance and economy. As a leading Russian provider of this type of information, RBC is in the perfect position to capture this niche. The management firmly believes that RBC TV will be a powerful instrument of creating value for RBC shareholders, without cannibalizing revenues from existing businesses," said RBC Chairman and CEO German Kaplun. "The time is right and we are positive that RBC TV will succeed."