Est Media Holding said it will propose at the company's EGM later this month to decide in spring 2012 on buying a 24% stake in festival organizer Sziget Kulturális Menedzser Iroda as part of its recently published restructuring plan.
Est Media estimated that the reorganization would require HUF 600-HUF 650 million in fresh capital, some of which the company would raise by issuing new shares.
Est Media shareholders authorized the board at the company's April AGM to formulate the reorganization plan aimed at generating operating profit during the second half of this year.
Est Media had after-tax losses of HUF 224 million in the first quarter of 2011 and losses of HUF 1.5 billion in 2010.
Est Media Holding owns a 51% stake in Sziget Kulturális Menedzser Iroda ─ the company organizing the Sziget Festival on a Danube island in Budapest among others ─ and has planned to buy up to another 24% stake in the company by 2013.
It spent HUF 2.7 billion on its current stake and the additional stake would cost HUF 2.3 billion.
Est Media announced in November 2007 that it would acquire 100% of the festival-organizer in five steps for a maximum price of HUF 4.95 billion.
Est Media said that keeping its share in Sziget Kulturális Menedzser Iroda at 51% or even reducing it by a few percentage points would not exercise a major impact on the company's financial results.
Est Media said that it would restructure some of its publishing and on-line media activities and sell its 80% stake in publisher TimeOut Budapest or reduce it to a size that would not amount to a financing obligation.
Est Media ceased its radio broadcasting operations earlier this year with the sale of its 100% stake in Radiocafé and 25% stake in NeoFM. It also reorganized its advertising and logistics divisions.
The company said the reorganization would entail substantial layoffs.
Est Media, which was known as econet.hu until February of this year, is an A-category issuer at the Budapest Stock Exchange.