New York -- After Recovery Network Inc. announced last week
that CBS Corp.'s Group W Network Services acquired an equity stake in the struggling
network, CBS "clarified" that the proposed delivery of common stock and cash
"represented the partial settlement of a debt" owed by Recovery.
Recovery's press release had claimed that GWNS --
CBS' Stamford, Conn.-based division that handles satellite distribution for various
broadcast and cable networks -- "has agreed to acquire a 500,000-share equity take in
[Recovery's] common stock."
That would represent about 5 percent of the fledgling
network's issued and outstanding shares, Recovery said.
CBS, though, said shortly afterward that it "was
considering, subject to certain conditions, the acceptance of 500,000 shares of Recovery
common stock and cash in partial settlement of an overdue trade receivable owed to CBS
Corp."
That debt was owed to GWNS "for technical services,
including satellite transmission of Recovery's signal," CBS added. The move did
not represent a strategic investment in Recovery, CBS said.
Recovery claims to reach about 5 million cable households,
mostly via leased-access or local-origination channels.
Recovery said in a December securities filing that it was
nearly out of cash. Then, last month, the network said it would get a cash infusion from
some belt-tightening and a letter of intent from an unnamed European institutional
investor.
GWNS, one of the country's largest distributors of
video programming, transmits nearly 6,000 hours of TV and cable programming each week for
the major broadcast networks and about 10 cable networks.
