The board of Hungarian media company Est Media decided at a meeting on Wednesday to raise capital by a minimum of HUF 2.59 billion and a maximum of HUF 4.78 billion through the private placement of company shares to be completed at the beginning of October, Est Media reported on Thursday.

Est Media said that the capital raise would be used for the capital conversion of supplier debts, the completion of its acquisition of Sziget Festival organizer Sziget Kft, expansion on the domestic and international program-guide market and implementation of the company’s reorganization plan.

Est Media added that the capital raise would be considered successful if by the end of the October 5 preference deadline the company receives at least HUF 200 million in cash subscriptions in addition to HUF 2.39 billion in non-cash contributions through the capital conversion of supplier debt, in-kind contributions and the completion of the acquisition of a further stake in Sziget Kft to prevent Est Media’s voting rights in the company from falling below 51%. The company noted that an institutional investor has already declared the intention to make a HUF 100 million cash subscription.

Preference shareholders, including institutional investors, will be eligible to make subscriptions of up to HUF 2.2 billion beyond the stipulated minimum subscription amount.

Est Media said that in the event of a successful capital raise, the company could generate consolidated revenue of HUF 6.3 billion in 2012, HUF 6.71 billion in 2013 and HUF 8.26 billion in 2016.

Est Media generated revenue of HUF 638.1 million in the second quarter of 2011, down 30.7% yr/yr. Est Media attributed its declining revenue to the termination of the company’s radio-station operations, the extraordinary high 2010 base of the company’s EGMPrint unit and declining turnover from its EGMIndoor advertising and EGMOnline units during the period.

Est Media, known as econet.hu until February, had revenue of HUF 8.38 billion in 2010 on higher advertising sales and the full consolidation of festival organizers Sziget and Volt.

In June, Est Media shareholders unanimously approved a reorganization plan to be carried out in Q2 and Q3 of 2011 that aims to put the company in the black at operating level, excluding its event unit, in the second half of this year.

Est Media sustained after-tax losses of HUF 311.5 million in the second quarter of 2011, up from after-tax losses of HUF 288.4 million in Q2 of 2010.

Est Media is an A-category issuer at the Budapest Stock Exchange.