Central European Media Enterprises Closes Successful Offering of $475 Million of Convertible Notes Secures Financing for Ambitious Growth Plans in a Period of Grave Financial Uncertainty in the Global Capital Markets

Central European Media Enterprises Closes Successful Offering of $475 Million of Convertible Notes Secures Financing for Ambitious Growth Plans in a Period of Grave Financial Uncertainty in the Global Capital Markets

- Purchase of call spread option is expected to eliminate any dilution until share price exceeds $151.20 at a cost of capital below current debt -

HAMILTON, Bermuda, March 10 /PRNewswire-FirstCall/ -- Central European Media Enterprises Ltd. ("CME") (Nasdaq/Prague Stock Exchange: CETV) today announced the closing of its offering of $475 million of senior convertible notes. The notes were sold to qualified institutional buyers and bear interest at an annual rate of 3.50%. The notes pay interest semi-annually on March 15 and September 15 of each year, beginning September 15, 2008, and mature on March 15, 2013.

Michael Garin, CEO of CME, commented: "At a time when financing window after financing window appears to be closing and could possibly remain closed for some time to come, I am delighted that CME was able to demonstrate its ability once again to successfully access the capital markets with an offering that provides so many benefits to our shareholders. We now have the capability to fund the ambitious growth plans we have for CME with no dilution expected for current shareholders below a share price of $151.20 and at a lower cost of capital than we are paying on our current debt. In this period of grave financial uncertainty, we all believe this will be an important competitive advantage for CME and will allow us to create significant value for our shareholders."

Wallace Macmillan, CFO of CME, said: "We considered the limited financing options available in the current turbulent financial markets and concluded that a convertible bond offering combined with a call spread overlay was the best option for CME and its shareholders. We are extremely happy that we managed to raise sufficient capital to fund the buyout of our minority partners in Studio 1+1 and to secure the flexibility to finance our plans to expand our business in Ukraine and across our region. We are also pleased that the purchase of a call spread overlay is expected to eliminate dilution for existing shareholders below a share price of $151.20 at a cost of capital below our current debt."

Adrian Sarbu, COO of CME, commented: "Since assuming the position of COO I have focused on maximizing both the current performance of our stations and the incredible growth opportunities we have in front of us. The fact that we have now secured the capital necessary to finance our plans in a period where this clearly will not be true for all companies gives me confidence in our ability to remain one of the fastest growing and best performing multinational broadcasters in the world."

The notes are convertible on the occurrence of certain specified events and at any time after December 15, 2012. CME used a portion of the proceeds to purchase a call spread overlay, which serves to increase the effective conversion price of the notes from $105.00 to $151.20, an 80% premium to the share price of CME's Class A common stock at the pricing of the notes.

At share prices below $151.20, the effective cost of capital of the notes after accounting for the cost of the call spread overlay is approximately 7.2% annually. Upon conversion, CME intends to pay the aggregate principal amount of the notes in cash and issue shares to settle any additional amounts. In purchasing the call spread overlay, CME expects to significantly reduce the potential dilution to existing shareholders from the offering as at maturity it would issue additional shares not covered by the call spread overlay only to settle any amount in excess of a $151.20 share price. (Please see Appendix 1 for assumptions and indicative calculations with respect to share issuances upon conversion of the notes.)

On the occurrence of certain specified events, particularly where early conversion occurs under the notes or the liquidity of shares of CME Class A common stock is dramatically changed (i.e., in the event of corporate mergers, takeovers or other defined events), CME may choose to terminate the call spread overlay at fair market value, in which case the number of shares provided by the call spread overlay may be less than those required by CME for conversion prices between $105.00 and $151.20.

The net proceeds from this offering, after deducting offering expenses and the cost of the call spread overlay, are approximately $400.7 million. CME intends to use these proceeds to acquire additional interests in Studio 1+1 and expects to retain the flexibility to fund further growth with funds available under its revolving facilities.

All $475 million aggregate principal amount of the notes have been sold to investors. The notes and subsidiary guarantees were not registered under the U.S. Securities Act of 1933, as amended, and accordingly the notes and subsidiary guarantees were offered and sold pursuant to an exemption from the registration requirements of the U.S. Securities Act of 1933, as amended.

CME is a TV broadcasting company operating leading networks in six Central and Eastern European countries with an aggregate population of approximately 90 million people. The company's television stations are located in Croatia (Nova TV), Czech Republic (TV Nova, Nova Cinema, Galaxie Sport), Romania (PRO TV, PRO TV International, Acasa, PRO Cinema, Sport.ro and MTV Romania), Slovakia (TV Markiza, Galaxie Sport), Slovenia (POP TV, Kanal A) and Ukraine (Studio 1+1, Studio 1+1 International, Kino, Citi). CME is traded on the NASDAQ and the Prague Stock Exchange under the ticker symbol "CETV".

Forward-Looking Statements

This press release contains certain forward-looking statements regarding future business opportunities. Statements that include the words "intend", "will" and similar statements of a future or forward-looking nature identify forward-looking statements in this press release for purposes of the U.S. federal securities laws or otherwise. For these statements and all other forward-looking statements, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. Forward-looking statements are inherently subject to risks and uncertainties, many of which cannot be predicted with accuracy or are otherwise beyond our control, including future investments in television broadcast operations in Ukraine and elsewhere, our ability to obtain additional external sources of capital and the volatility of the share price of our Class A common stock, and some of which might not even be anticipated. Forward-looking statements speak only as of the date on which they are made, and CME does not undertake any obligation publicly to update or revise any forward-looking statement, whether as a result of new information, future developments or otherwise.

Appendix 1

Here we present a simple example, which should not be read as a forecast of share price performance and assumes no adjustments to the notes or the call spread overlay. Should the share price exceed $151.20 at the maturity date in five years, CME intends to repay $475 million in cash and would issue a certain number shares to the noteholders as specified in the table below. Should the share price remain below $151.20 at maturity, CME will only be required to repay $475 million in cash, as any additional shares required to be issued on conversion of the notes when the conversion price is between $105.00 and $151.20 will be offset by shares acquired from the call spread overlay counterparties. The table below shows potential dilution if the share price exceeds $151.20 in five years time.

   Dollars Raised                        $475,000,000   Conversion price                           $105.00   Underlying Shares                     4,523,809.52   Cap Price Under the Call Spread    Overlay                                   $151.20    Stock Price     Number of shares issued upon conversion        $151.20                                           -          $155                                     110,906          $160                                     248,810          $165                                     378,355          $170                                     500,280          $175                                     615,238          $180                                     723,810          $185                                     826,512          $190                                     923,810          $195                                   1,016,117          $200                                   1,103,810          $205                                   1,187,224          $210                                   1,266,667          $215                                   1,342,414          $220                                   1,414,719          $225                                   1,483,810  

First Call Analyst:
FCMN Contact:

Source: Central European Media Enterprises Ltd.

CONTACT: Romana Tomasova, Director of Corporate Communications,
Central European Media Enterprises, +44(0)20-7430-5357,
romana.tomasova@cme-net.com

Web site: http://www.cetv-net.com/

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Profile: International Entertainment