The Chinese fund Orient Hontai Capital, owner of 53.5% of Mediapro, will increase its stake in the company to 76% and promised to inject €620 million to pay off the company's debts. Meanwhile, the remaining 24% will still be in the hands of the other current shareholders, the two founders of the audiovisual production company, Jaume Roures and Tatxo Benet, and the British multinational WPP, according to El Confidencial.
From the €620 million that the Chinese group agreed to inject to cancel part of the company's payment commitments, the first €150 million will be paid immediately in the form of subordinated debt. Later, at an extraordinary meeting, the shareholders will approve a capital increase, for which the fund will contribute an additional €470 million.
The Orient Hontai group paid €1.019 million to acquire a majority stake in Mediapro in 2018. However, the pandemic hit the economy of the Spanish producer hard, and in 2020, it registered a decline of 38% in turnover, to €1.115 million, and operating losses of €260 million. In 2019, the year prior to Covid-19, the group’s EBITDA had been positive €224 million.
With around 7.000 employees and 58 locations in 36 countries, this year the group failed to meet its debt maturity before the European summer and now has an overdraft of €90 million. Furthermore, next month it has to face another payment of €60 million, so Orient Hontai intends to cover this amount immediately.