Emmis to Sell Interest in Argentine Radio For $7 Million

Emmis Communications Corporation is selling its controlling interest in Votionis, S.A., an Argentine broadcasting company, to its local minority partners, Daniel Hadad and Viviana Zocco, for approximately $7 million in cash. Votionis operates one AM and one FM station in Buenos Aires.
Emmis also said the Belgian government has awarded Emmis licenses to operate nine FM radio stations serving more than 50% of the population in the Flanders region of Belgium. Emmis expects to use approximately $3 million of the proceeds from the sale of Votionis to fund the development of these stations.
Emmis International President Paul Fiddick said the announcements were consistent with the company’s “strategy to become geographically targeted with our international interests.”
Emmis International now consists of Slager Radio, a national radio station in Hungary, as well as its interests in Belgium.
In 1999, Emmis purchased a 75% interest in Votionis. Since then, the company said it has enjoyed significant commercial and ratings success despite political and economic instability in Argentina.
The Argentine peso was substantially devaluated relative to the U.S. dollar early in 2002. Because of this, Emmis will report a currency translation loss upon exiting its investment in Argentina of approximately $11 million. However, on an actual transaction basis, Emmis will have realized a slight gain on the sale.
Since the devaluation, Emmis has sought a suitable exit point from Argentina, and concentrated on improving its business during the economic recovery.
The Votionis sale is subject to Argentine regulatory approvals and is expected to close during the first half of 2004.