Saudi ART to purchase stake in Tele-Liban
The Lebanese government recently approved the partial privatization of the state-owned Tele-Liban through the sale of a 49 percent stake to the Saudi-owned Arab Radio and Television Network (ART). Press reports have suggested that ART paid $7 million for its stake in the station.
The Cabinet allocated nearly $46.50 million in its 2001 budget to Tele-Liban, a sum that is now expected to be used to fulfill the government’s contractual obligations.
Under the terms of the agreement, the government will appoint 6 board members and ART will have the right to appoint the other 6 directors. Further, the government pledges to layoff all of the station’s staff and pay their severance packages, as well as to settle all outstanding dues the station owes.
ART will appoint the station’s financial, technical, administrative and programming managers, while the government will nominate the political programming and news directors. Finally, the government will be allowed 30 hours per week to air its programs out of a total of 140 hours of weekly broadcast.
A report by PricewaterhouseCoopers (PWC) issued last year clearly stated that Tele-Liban is beyond financial rescue and recommended the station’s liquidation. PWC revealed that the station has accumulated $47.90 million in losses in the 1996-98 period and had current liabilities of $43.561 million.
The report also disclosed that the station is breaking Lebanese commercial laws as well as audio-visual laws by continuing to function after its losses exceeded 75 percent of its capital. The report said the station has 539 employees costing $10.50 million per year, equivalent to twice the station’s revenues from advertising at the time. — (Lebanon Invest)