Media group Impresa needs €80 million to balance its accounts (if banks do not forgive debt)
The company needs a recapitalisation of €80 million, which explains the negotiations with the Italian group MFE, about to be concluded. Debt forgiveness by banks could reduce requirements.
After all, what are Impresa SGPS’s capital requirements to get out of its current critical situation, with historic losses, erosion of equity and almost non-existent liquidity? According to the accounts as of 31 December 2024 (however, the figures for 2025 may have deteriorated), the owner of the SIC television station and the Expresso weekly newspaper needs a recapitalisation of around €80 million to restore its capital structure to solid levels. Negotiations between Impreger, the Balsemão family’s company, and Italy’s MediaForEurope (MFE), owned by the Berlusconi family, are in the final stages, just days away from completion, and are precisely the result of the urgent need for fresh cash to flow into the media group.
What are the group’s needs? To achieve 50% financial autonomy (consolidated), equity must equal 50% of assets. In other words, with consolidated assets of approximately €340 million, this requires around €170 million in equity. However, taking into account the current €90 million, it will be necessary to increase equity by precisely around €80 million. But this injection will also resolve the other two critical points in the holding company’s financial structure, with room to improve the accounts of the so-called “subsidiaries”, SIC and Impresa Publishing. In addition to raising financial autonomy to 50%, it would cover the working capital gap (as 80 million is higher than 65.5 million) and fully offset the losses for 2024, which amounted to 66.2 million euros in consolidated terms.
As ECO revealed, the “parent company”, Impresa SGPS, is the listed company, but its main source of revenue is SIC, the operational “subsidiary”, and one basically lives off the other. SGPS has no revenue of its own and depends entirely on dividends distributed by its subsidiaries, SIC and, to a lesser extent, Impresa Publishing, which owns Expresso. In 2024, according to the annual report and accounts, the dividend received by the holding company was €8.3 million, but its financial expenses amounted to €8.4 million. In other words, the dividends are no longer enough to pay even the interest, let alone the remaining structural costs.
Let’s break it down:
- Impresa SGPS ended 2024 with a weakened financial structure. Consolidated equity was only €89.7 million, representing around 26% of total consolidated assets (€340.5 million). In other words, only a quarter of the group’s assets were financed by equity, reflecting a high level of indebtedness (financial autonomy well below 50%). In addition, consolidated working capital was strongly negative: current assets (€73.2 million) were insufficient to cover current liabilities (€138.7 million), resulting in a short-term deficit of around €65.5 million. In this dramatic scenario, there is liquidity pressure, which explains, for example, the news that in August the group delayed the payment of holiday pay (although within the deadline defined by law so as not to be considered late payment of wages). Contributing to this imbalance, Impresa recorded a consolidated net loss of €66.2 million in 2024. With this negative result, equity fell to the aforementioned €89.7 million (€156 million in 2023).
- With a capital increase of around €80 million, equity would rise to €170 million. And with this increase mainly applied to debt reduction, consolidated financial autonomy would stand at 50% on €340 million in assets. Working capital would no longer be a problem: €80 million exceeds the short-term gap, allowing the €65.5 million in current liabilities to be fully covered and generating a surplus of around €15 million in current assets.
As ECO revealed first-hand, contacts and initiatives to find investment partners for the group go back a long way, always with the principle that the Balsemão family could maintain control of the group – something that now seems to be out of the question. Negotiations with the Soares dos Santos family dragged on for months, with suspensions in between, and eventually collapsed. But they had one assumption, which is likely to be renewed with the Italians from MFE (formerly Mediaset): a haircut on bank debt.
In this possible scenario, the recapitalisation needs of the Impresa group could be significantly reduced compared to the €80 million identified in an “as is” deal. According to ECO’s calculations, and taking into account the 2024 reports, if the banks accept a debt forgiveness of around 30%, the recapitalisation needs will fall to around €46 million.
The financing obtained by Impresa SGPS (in consolidated terms) was around €115 million (current and non-current) at the end of 2024, so a 30% haircut will correspond to around €35 million to be deducted from the debt. This will make it possible to rebalance the group’s financial structure, immediately achieving 50% financial autonomy, guaranteeing working capital and recovering the capital lost in 2024 with the €66.2 million.
Obviously, if this deal results in a cut for private investors who subscribed to SIC’s latest bond issue for the period 2024-2028, worth €48 million, the recapitalisation needs will be lower. But such a decision would undermine confidence in the company, which would remove it from the market for years.
The sale of the headquarters building may be back on track
Another alternative to a heavy injection of funds could be to try again a financial operation that failed in recent months. The failed attempt to sell the company’s headquarters to the BPI Imofomento fund for €37 million, announced in July, clearly illustrated the difficulties Impresa faces in generating liquidity and managing its cash flow.
The transaction, which provided for an initial payment of €25 million followed by a second tranche of €12 million after 48 months, could have significantly eased financial pressure and allowed for the early repayment of loans worth around €14.9 million.
The failure of this operation, at a time when the company is actively seeking alternative financing, reinforces the perception that Impresa’s assets may be overvalued given current conditions, not only in terms of the property market, but also in terms of its main assets, as was evident from the €60.7 million goodwill impairment loss in last year’s accounts.
However, with a new controlling shareholder, the operation could be resumed, with a financial plan that is compatible with market values and limits the high need for “fresh money”.
