TV Puls talking to Italy's Mediaset about investment

Cash-strapped TV Puls, last year's newcomer to the television market, is in talks with Italy's leading media group about investing in the station. Mediaset, 48%-owned by Silvio Berlusconi's Fininvest, is one of two companies interested in investing in TV Puls, said Maciej Pawlicki, the station's programming director. "The talks (with Mediaset) are intensive, and there is also an Italian financial investor interested in TV Puls," he said. Pawlicki refused to reveal further details, but according to media reports, TV Puls is also considering a deal with Italy's Fincast, the owner of Tele 5, a Polish cable and satellite television station. "We're talking, but it's not true we're planning to broadcast their programming," Pawlicki said. "It's more about 'operating cooperation.' " TV Puls has been recently fighting off bankruptcy as the broadcaster's shareholders refuse to pour any more money into the station. "(The shareholders) didn't even agree to guarantee a bank loan for the station," said a market source who asked not to be named. So far, Treasury Ministry-controlled companies have funded TV Puls. The Franciscan Order, a religious group, holds a 46% stake in TV Puls, while other major shareholders include KGHM Metale, a subsidiary of mining and telecoms giant KGHM Polska Miedź, PZU Życie, Poland's largest life insurer, power grid operator Polskie Sieci Energetyczne (PSE) and oil refiner Polski Koncern Naftowy Orlen (PKN Orlen).

According to Wojciech Okoński, the deputy chief executive officer of Prokom Investments, TV Puls' sole private shareholder, the station did not live up to expectations and is not worth further investments. "The station's management hasn't found a strategic investor so any more money we would put into it would only prolong TV Puls's life, but it wouldn't secure its development," Okoński said. "The management told us it still needs $47 million over the next two years because it won't be able to survive on ad revenue." But according to TV Puls's Pawlicki, Prokom Investments didn't fulfill its financial obligations to the station since it still hasn't paid zł. 26 million ($6.43 million) for bonds it agreed to purchase in March 2001. "They owe the station some zł. 32 million ($7.8 million), including interest," Pawlicki said. Prokom has no intention of making the payment, Okoński said. "TV Puls's management didn't fulfill the conditions of our agreement, and there were mistakes made during the bond issue, which is why we didn't pay," he said. "If we paid this money, we would expose our shareholders to losses." The dispute between the two entities looks set to continue for some time. Early last week, the Warsaw District Court declared illegal TV Puls's move to freeze Prokom Investment's bank account and Prokom Software shares worth zł. 128.8 million ($30 million) as collateral for the bond payment. A few days later the regional court rejected Prokom Investment's motion to annul or limit the amount of collateral for its failure to buy the bonds. Pawlicki said TV Puls would most likely appeal the district court's decision.