TV 1 was in dire financial straits, according to the Estonian business daily Aripaev. The total liablities of the station exceeded 50 million kroons, while assests only accounted for 25 to 30 million.
Guido Gritsenko, director of the risk capital department at Uhispank, said that though the property of the private television channel has not yet been booked in the assets of Uhispank, the bank has already made changes within the TV 1 board.
"The Sonajalg brothers, the founders of the Estonian Independent Television company that operates the TV 1 channel, were replaced by professionals in the world of television," Gritsenko said. "Though we have replaced some of the TV 1 leaders, no large scale changes in programming are foreseen as it could reduce the present target group."
The shares going to Uhispank are still insufficient to cover the liabilities to the bank. The TV station has to redeem 15 million kroons worth of bonds in six months' time.
"When the television company does not repay, there are other guarantees besides shares, like real estate and technology," Gritsenko said.
At the end of July, the bank prolonged the payment term by six months, with the interest rate of the initial contract.
Back then, the Uhispank loan department director Andrus Kimber had told Aripaev that it's normal to delay the payment term of such financing projects.
According to Gritsenko, the bank is currently looking for an investor, who would be interested in the shares as well as keeping the TV channel afloat.
"But we have no intention of announcing a public tender as the information has spread within the television circles anyway," he said.
According to Gritsenko, Uhispank is relying on the new board to increase the number of viewers. TV 1 has had trouble overcoming financial hardships despite the growing popularity of the channel this year.
According to Margit Mikk-Sokk, the public relations manager of TV 1, the number of Estonian viewers has more than tripled since January this year. In July 1998 TV 1 had a market share of 12 percent, including satellite channels visible in Estonia. "In July the increase in the number of viewers was the highest and the trend looks to continue," Margit Mikk-Sokk stated that TV 1 was improving its position all the time. "And at the start of August this year new transmitters were launched," she continued.
According to the TV 1 public relations manager, the channel's share in the television advertising market in Estonia was about 35 percent at the end of 1997.