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. Last Updated: 07/27/2016

Battle For NTV Ahead

MOSCOW/LONDON - Russia's top independent television network NTV faced an increasingly uncertain future Friday as the two main shareholders prepared to face off against each other in politically charged court battles.

The Media-Most group has filed suit in London and Gibraltar to stop state-controlled Gazprom-Media taking control of NTV, while Gazprom-Media said Friday it might take legal action to acquire shares it holds as loan collateral.

"We are considering the possibility (of filing a lawsuit)," said Gazprom-Media spokeswoman Aelita Yefimova.

The breakdown in relations between the two battling NTV shareholders throws into doubt talks with potential foreign investors which have recently included CNN founder Ted Turner.

Industry sources said Gazprom, which gained a large stake in NTV last year in return to forgiving some of its debts, appeared to be under pressure from the government to take control of NTV.

They added that Gazprom, NTV's main creditor, may even force NTV into bankruptcy unless it gets control -- a move which may then see Kremlin-friendly investors pick up the pieces.

NTV, Media-Most's prize asset and the most influential Russian media outlet not controlled by the Kremlin, has been more critical than other stations of President Vladimir Putin.

Media-Most says the battle over NTV is also linked to legal moves against its owner and NTV's founder Vladimir Gusinsky, who is in Spain fighting extradition to Russia on fraud charges he says are politically motivated.



MORE OFFICE RAIDS

Media-Most spokesman Dmitry Ostalsky said prosecutors Friday put further pressure on Gusinsky's company by searching the Moscow offices of another senior Media-Most executive.

"I think the general prosecutors' office is using every commercial deal that involves Media-Most to try to find something criminal," he said.

At the centre of the battle for control of NTV is a 19 percent stake in the TV network which was offered by Gusinsky as collateral for one of the loans made to the media company.

The 19 percent holding is part of Gusinsky's 49.5 percent stake. Gazprom owns a further 46 percent and the remainder is in the hands of U.S. investment trust Capital Research.

Gazprom and Media-Most agreed last year to find a foreign investor to inject new funds into NTV, but the two shareholders have been at loggerheads ever since and Media-Most has been holding its own talks with U.S. media tycoon Turner.

The two shareholders had originally planned to sell 25 percent to an international investor for a minimum of $90 million. This was to include the 19 percent collateral, just over five percent from Media Most and 0.5 percent from Gazprom.

"So long as the fighting is going on between the government, Gazprom and Media-Most, you'd have to be insane to get in the middle of it," said one industry source.



CLOCK TICKING FOR SETTLEMENT

Sources said the political wrangling was likely to continue for some months, but banks would call in their loans mid-year, forcing the shareholders to make a decision about NTV's future.

In what is becoming a highly complex saga, Gazprom pulled out of a deal on Thursday with Deutsche Bank, the investment bank originally chosen to find a foreign buyer of an NTV stake.

Gazprom said Media-Most had not fulfilled its obligations under a Nov. 17 agreement which set out the terms for solving a dispute over more than $470 million in debt.

"Under the agreement of Nov. 17, we were to sell the NTV stake together with Deutsche Bank, but since the agreement has been terminated it is difficult to say what will happen now," the Gazprom-Media spokeswoman said.