Focus Media (FMCN) Provides Update On Expected Charges from Restructuring Actions

December 9, 2008 5:20 PM EST

Focus Media Holding Limited (Nasdaq: FMCN) today provided an update on the expected charges resulting from the restructuring of its CGEN in-store advertising network and announced the termination of its remaining wireless advertising (interactive marketing) business.

• According to the terms and conditions in the CGEN Share Purchase Agreement dated as of December 8, 2007, in addition to the initial payment of $168 million in cash paid, Focus Media was to make additional payments of up to $182 million, partly in cash and partly in Focus Media ordinary shares (valued at the per share equivalent of US$53.42 per ADS) contingent upon CGEN meeting certain earnings targets during the twenty four month period following the closing of the transaction. Because the 2008 performance of CGEN's in-store advertising business failed to reach the minimum conditions required for any additional earn-out payment, Focus Media has terminated the earn-out provisions in the CGEN Share Purchase Agreement and will make no further payments relating to CGEN acquisition
  
• Focus Media plans to restructure CGEN's current in-store advertising business. As a result, Focus Media expects to incur non-cash one-time restructuring charge of approximately $200 million in Q408.

In addition, Focus Media announced it will terminate its remaining wireless advertising (interactive marketing) business due to changes in market conditions. As a result, Focus Media will incur additional one-time non-cash impairment charges of approximately $20 million in Q408, representing all of its remaining tangible and intangible assets relating to its wireless advertising business

Focus Media Holding Limited operates out-of-home advertising network using audiovisual digital displays in the People's Republic of China.

Related Categories

Corporate News
Guidance

Stocks Mentioned

Add Your Comment

Name

Subject

Body

Verification can't see the text?
click here to refresh the image.
what's this?