Metromedia $480 million Georgia business interest sale called off by last offering group member

By Caroline Salls

Pittsburgh, Dec. 14 - Metromedia International Group, Inc.'s proposed sale of substantially all of its business interests in Georgia was terminated by Salford Capital Partners, the sole remaining member of the offering group, according to a 10-K filing with the Securities and Exchange Commission.

According to the 10-K, Salford told Metromedia that it is terminating the exclusivity restrictions of the offer agreement as a result of an alleged breach of an access-to-information covenant.

Salford also asked Metromedia to reimburse it for the $1.01 million in transaction expenses it incurred in connection with the proposed sale.

Metromedia said it is evaluating Salford's claim for reimbursement of its expenses to assess whether the request is with or without merit.

As previously reported, on Oct. 2, Metromedia executed a letter of intent with a group of investors in connection with their $480 million cash offer to acquire all of the Georgia business interests.

In connection with the offer agreement, the company entered into separate lockup, support and voting agreements with representatives of holders of about 80 % of its 4.1 million outstanding shares of preferred stock, under which the preferred representatives agreed to support a Chapter 11 plan of reorganization that was to be filed in the U.S. Bankruptcy Court for the District of Delaware.

Charlotte, N.C.-based Metromedia owns interests in communications and media businesses in the country of Georgia.

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