News Corp to Receive $457.3 Million Cash Payout in BSkyB Refinancing

Strategic Insights -

A significant debt refinancing by British Sky Broadcasting (BSkyB), a 50% owned subsidiary of News Corp, has resulted in a substantial cash payout for its major shareholders. The BSkyB refinancing, arranged by Toronto-Dominion Bank and Citibank, has reduced the company's shareholder debt to $1.1 billion, including accrued interest. This reduction has created a window of opportunity for shareholders to realize some of their original investment while retaining equity stakes in the company.

Key Takeaways:

  • News Corp will receive $457.3 million in cash as part of the BSkyB refinancing deal.
  • The refinancing reduced BSkyB's shareholder debt to $1.1 billion, including accrued interest.
  • Other shareholders, Pearson plc and Chargeurs SA, will receive repayments totaling $100 million each, including payments already made.
  • Granada Group plc will receive a total of $75 million, including $12.5 million already paid.
  • The refinancing includes a new five-year, $500 million revolving credit facility, with Toronto-Dominion Bank and Citibank arranging a total of $250 million.
  • The new facility is non-recourse to shareholders, meaning that if the company defaults, the creditors will not be able to pursue the shareholders for repayment.
  • The payments will be in addition to the $100 million paid out since December 1993.
  • The refinancing is seen as a positive development for BSkyB, with two British brokers increasing their valuations on the company in recent weeks.

Statistics:

  • $457.3 million: The cash payout News Corp will receive as part of the BSkyB refinancing deal.
  • $1.1 billion: The total shareholder debt of BSkyB, including accrued interest, following the refinancing.
  • 50%: The proportion of BSkyB ownership held by News Corp.
  • $100 million: The total repayments Pearson plc and Chargeurs SA will receive.
  • $75 million: The total repayments Granada Group plc will receive.
  • 5 years: The duration of the new revolving credit facility.
  • $500 million: The total amount of the new revolving credit facility.
  • $250 million: The amount arranged by Toronto-Dominion Bank and Citibank as part of the refinancing.

Sources:

  • News Corp's BskyB refinancing deal (agencies)
  • BSkyB's debt refinancing details (Natwest Securities, BZW)
  • Toronto-Dominion Bank's credit facility agreement