Premiere to issue 367 million new shares

Pay TV group expects to raise $557 mil to recapitalize

COLOGNE, Germany -- Struggling German pay TV group Premiere will issue shares valued at about €412 million ($557 million) as part of CEO Mark Williams' strategy to recapitalize the company.

News Corp., Premiere's largest shareholder with a 29% stake, has backstopped the issue at €1.12 ($1.51) a share, meaning Rupert Murdoch's company will buy up any unsold Premiere shares. That could potentially turn News Corp. into the majority owner of Premiere.

But demand for the issue is expected to be strong. Premiere shares dipped slightly Monday, falling about 3% to €2.14 ($2.9), but traders in Frankfurt had expected the new shares to be issued at or near €1 so there was no run on Premiere stock.

Premiere lost about $360 million last year and came close to collapse. Williams has managed to restructure the company's debt and, with the new share issue, hopes to begin expanding program spending. Williams' target is to return Premiere to profitability by 2011.