Hughes to Buy Brazilian Satellite TV Unit

Grupo Abril, Brazil’s No. 2 media group, agreed to sell its satellite TV operations to Hughes Electronics Corp. and Cisneros Group to raise cash to pay down debt. Tevecap, Abril’s pay-television arm, sold its 10% stake in Galaxy Latin America to El Segundo-based Hughes and Venezuela’s Cisneros for an undisclosed sum.

It also sold its 100% interest in Galaxy Brazil, GLA’s Brazil franchise, to GLA, which uses the DirecTV brand name under license from Hughes. Proceeds from the sale will be used to buy back Tevecap’s $15.4 million of bonds maturing in 2004.

The sale depends on acceptance by bondholders and approval from Brazilian regulators. Tevecap, which also runs Brazil’s TVA cable-TV service, has seen its dollar debt balloon since Brazil’s January currency devaluation and revenue stagnate amid recession.

On Tuesday, Tevecap bonds traded at less than half of face value. Hughes shares rose $1.38 to close at $58.88 on the New York Stock Exchange.