AOL may cast off CD division
AOL Time Warner is considering selling its CD and DVD manufacturing business in an effort to level off its mountain of debt, according to published reports.
The unit, which operates under the Warner Music Group division, makes discs for the media giant's movie and music divisions. Company executives testing the waters hope the business will fetch nearly $1 billion, according to the reports.
Possible suitors include Technicolor, a unit of France's Thomson Multimedia, and Canada's Cinram International, according to The Wall Street Journal. Another possible buyer is Matsushita Media Manufacturing, according to The New York Times.
The prospect of a sale underscores the company's immediate need to pay off its $27 billion of debt. During an earnings call in January, AOL Time Warner CEO Richard Parsons said he plans to reduce debt to $20 billion by 2004 largely via the selling of assets, spinning off of units and tapping into its cash. The company's Time Warner Cable division plans to go public by the end of the summer.
Earlier this week at an investor conference, Parsons said the company is exploring other the sale of other assets, including its three professional sports teams in Atlanta, its book publishing unit, and its stakes in cable networks Court TV and Comedy Central. Reports have also surfaced that AOL Time Warner is considering selling its music division to EMI Group, which it tried to acquire in 2000.
AOL Time Warner has been suffering from sagging revenue in its America Online division, which faces a crumbling online advertising business and softness in its subscriber base.
An AOL representative was not immediately available for comment.
Reuters contributed to this report.