By Gilles Castonguay
MILAN--Italian publishing group RCS Mediagroup SpA (RCS.MI)
Sunday said shareholders representing nearly half of its stock had
agreed to take part in a capital increase to help in its struggle
to cut costs, sell assets and refinance debt.
RCS, the group behind the influential newspaper Corriere della
Sera, said the board expected RCS to have the resources to stay in
business even though it foresaw the group running a significant
loss this year.
"The (board members)...consider it reasonable to expect that the
Company can dispose of adequate resources to continue operating for
the foreseeable future," it said in a statement.
Faced with a sharp decline in advertising revenue as a result of
the crisis in Italy and Spain, where it also has a presence, RCS
adopted in December a plan to cut costs and sell assets no longer
considered core to its business. The three-year plan also aims to
reduce its reliance on print by expanding into digital media.
Among these various initiatives, RCS would look at selling 10
magazines in Italy--or close them down at the cost of hundreds of
jobs, a person close to the group recently said.
In the statement issued Sunday after a meeting of its board, RCS
said shareholders representing 44% of its stock had agreed to take
part in a capital increase of at least EUR400 million by July, and
a second, optional one for up to EUR200 million by December
2015.
Their agreement to the two capital increases was crucial for RCS
to convince a pool of banks to open a total of EUR575 million in
credit lines to help it refinance debt, it said.
Some of those banks are among the shareholders that agreed to
the capital increases, such as Intesa Sanpaolo SpA (ISNPY, ISP.MI)
and Mediobanca (MDIBY, MB.MI).
In 2012, RCS posted a wider net loss of EUR509.3 million against
a net loss of EUR322 million for the previous year.
Earnings before interest, taxes and depreciation, or EBITDA,
fell to EUR61 million from EUR163.4 million.
Consolidated revenue slipped EUR1.60 billion from EUR1.86
billion.
Net financial debt stood at EUR845.8 million, down from EUR938.2
million at the end of the same period, partly thanks to the
proceeds earned from the sale of its French book unit RCS Livres,
which controls publishing group Flammarion.
RCS forecast a "significant" net loss for 2013 on weak
consolidated revenue.
"At the moment, signals of a reversal in the trend (crisis) is
not expected in 2013 during which risks and uncertainties are still
high," it said.
RCS nevertheless expected its debt to come down some more what
with the planned asset sales.
RCS is holding a conference call with analysts on Monday.
Write to Gilles Castonguay at gilles.castonguay@dowjones.com
Order free Annual Report for Assicurazioni Generali SpA
Visit http://djnweurope.ar.wilink.com/?ticker=IT0000062072 or
call +44 (0)208 391 6028
Order free Annual Report for Mediobanca SpA
Visit http://djnweurope.ar.wilink.com/?ticker=IT0000062957 or
call +44 (0)208 391 6028
Order free Annual Report for Intesa Sanpaolo SpA
Visit http://djnweurope.ar.wilink.com/?ticker=IT0000072618 or
call +44 (0)208 391 6028
Order free Annual Report for Fiat SpA
Visit http://djnweurope.ar.wilink.com/?ticker=IT0001976403 or
call +44 (0)208 391 6028
Order free Annual Report for RCS MediaGroup SpA
Visit http://djnweurope.ar.wilink.com/?ticker=IT0003039010 or
call +44 (0)208 391 6028
Order free Annual Report for RCS MediaGroup SpA
Visit http://djnweurope.ar.wilink.com/?ticker=IT0003039028 or
call +44 (0)208 391 6028
Order free Annual Report for Fiat SpA
Visit http://djnweurope.ar.wilink.com/?ticker=US3156218881 or
call +44 (0)208 391 6028
Order free Annual Report for Intesa Sanpaolo SpA
Visit http://djnweurope.ar.wilink.com/?ticker=US46115H1077 or
call +44 (0)208 391 6028
Order free Annual Report for Mediobanca SpA
Visit http://djnweurope.ar.wilink.com/?ticker=US58502K1060 or
call +44 (0)208 391 6028
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
