Rupert Murdoch's News Corp will raise its stake in German pay-TV broadcaster Sky Deutschland. The deal is said to reflect the Australian media mogul's confidence in the future of German pay-TV in a difficult market.
Murdoch's News Corp would increase its stake in Sky Deutschland to 54.5 percent through a capital increase at its subsidiary News Adelaide, which already held 49.9 percent in the German pay-TV broadcaster, Sky Deutschland announced Monday.
News Adelaide had raised 347 million euros ($463 million) by issuing 77.9 million shares at 4.46 euros a share, the broadcaster said.
In addition, Sky Deutschland said it had secured 300 million euros in credit facilities, which were backed by News Corp.
"Our new long-term financial structure gives us the opportunity to expand services and carry through our strategy," said Sky Deutschland Chief Executive Brian Sullivan.
News Corp, the media empire owned by Australian billionaire Rupert Murdoch, began building a stake in Germany's only pure pay-TV broadcaster in 2008. In November 2012, German financial authorities cleared the way for Murdoch to raise its stake to own a majority. They allowed Sky Deutschland to carry forward losses in case its shareholder structure changes.
Formerly known as Premiere, Sky Deutschland is said to carry forward losses of 2.3 billion euros because it was able to make a profit in only one year since it was founded in the early 1990s.
Murdoch's News Corp has invested about 1 billion euros in the business, which partly owns lucrative broadcasting rights to Germany's Bundesliga soccer league. However, German consumers can choose from more than 30 free-to-air TV channels, which hold a more watered-down stake in the Bundesliga rights, and many are therefore reluctant to pay extra.
According to figures released in 2012, some 3.36 million Germans subscribe to some or all of Sky Deutschland's channels.