The World: Berlin - Bertelsmann's owners to take 40 per cent cut in pay

Bertelsmann's owners have agreed to take a 40 per cent cut in income this year to ensure the media group remains a privately owned company.

The Mohn family, and its charitable foundation, have decided to take a dividend of EUR100 million this year, compared with EUR167 million in 2005.

The move has been made in a bid to assist the group's efforts to repay a EUR4.5 billion loan it has taken on to buy out the only remaining outside investor, Groupe Bruxelles Lambert.

The family will also sell its BMG music publishing arm to help finance the deal. The company accounts for just 2 per cent of the overall business and is worth around EUR1.5 billion.

The company expects to be able to pay off the remaining debt through cashflow by the end of 2007.

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