News Corp to backstop €340 million financing measures

London: News Corporation has announced that it has agreed to backstop €340 million of financing measures that are being initiated by Sky Deutschland AG (“Sky Deutschland”).

The financing measures will consist of a rights offering of up to 269.6 million newly issued registered shares, which may be combined with a bond issued to News Corporation that is convertible for up to 53.9 million underlying Sky Deutschland shares, and/or a loan provided by News Corporation. News Corporation will have the right to convert the bond into equity at any time following a 40-day holding period, subject to certain black-out periods. If not converted, News Corporation will have the option to redeem the bond for cash upon its maturity in four years. The issuance and size of the convertible bond and/or loan will depend on the amount raised through the rights offering in order to ensure that the overall proceeds to Sky Deutschland amount to €340 million.

News Corporation is committed to backstop the rights offering at a price no lower than the legally permissible minimum (€1). The financing measures are structured such that News Corporation’s shareholding in Sky Deutschland will not exceed 49.9 percent from its current position of 45.42 percent unless News Corporation elects to do so.

News Corporation’s backstop commitment is subject to certain customary conditions such as the absence of a material adverse change in Sky Deutschland’s business. The financing measures are expected to be completed by no later than 31 January 2011.

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