Sky Argentina faces July 10 shut down date

Tuesday, June 11, 2002

Argentine satellite TV operator Sky Argentina said it will shut down operations after July 10 because it could not find partners or funding to replace its main shareholders, Argentine financial daily El Cronista reported.

Brazilian media group Globo and its Mexican counterpart Televisa, which own 60% of Sky Argentina, have refused to help the company pay its 32mn pesos (US$9.22mn) debts with some 20 creditors.

Minority shareholders News Corp (30%) and Liberty Media (10%) were unable to find new funding sources that would let Sky continue to operate.

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Creditors are unlikely to recover much of their investment by stripping the company of its assets. Sky Argentina leaves behind personal satellite dishes, which cost the company US$29mn but are of little value on the local market since they are not compatible with competitors' hardware.

Since launching operations in Argentina in November 2000, Sky had invested more than US$120mn in the country. At the end of 3Q01, the firm reported 100,000 customers.

However, the country's economic crisis has more than halved the number of subscribers to 45,000 - an unexpected boon for rival cable and satellite TV operators Directv, Cablevision and Multicanal.