MultiChoice walks away from TopTV bid

·2 May 2013

While Dynamic TV Consortium says it is contemplating its next move – having had its last minute rescue bid for TopTV rejected – its financial backer, Multichoice, has pulled the plug on its funding for the group.

DStv operator, MultiChoice had late last month (April) approved funding of R500 million, “for the purposes of implementing a credible business rescue plan and securing the on-going sustainability of ODM”.

However, in a meeting held by TopTV’s parent company, On Digital Media on Tuesday, a rescue plan proposed by China based pay-television firm StarTimes Communications Network, was preliminarily adopted by an overwhelming majority of 93.9% of creditors that voted – of which 52.9% represented independent creditors’ voting interests.

“The rescue plan was thereafter finally adopted by a unanimous vote of preference shareholders (100% in favour) and a majority vote of ordinary shareholders (99.3% in favour),” ODM said.

The group said it had received two late unsolicited expressions of interest, which were presented during the meeting, after which creditors and shareholders were invited to discuss the rescue plan.

“Upon the conclusion of that discussion, and a break to enable creditors and shareholders to obtain approvals and mandates, the rescue plan was voted and finally adopted by the creditors and shareholders of TopTV,” ODM said.

ODM began business rescue proceedings late last year, in order to stay afloat financially while it searched for an equity partner.

StarTimes has committed to acquire a 20% stake in TopTV, and provide “sufficient additional capital” to pay off the company’s creditors to ensure solvency.

Local regulations currently cap foreign ownership on licensed broadcasting entities at 20%.

It is believed that TopTV was mere hours away from going off air, had the Star Times bid not been accepted.

Dynamic TV Consortium is a broad-based consortium led by Given Mkhari of MSG Afrika Media and Malose Kekana of Falk Trading.

The group said in a statement on Wednesday (1 May) that it had noted Tuesday’s outcome of the business rescue process.

“The creditors and shareholders have made their decision and we are studying the process, outcomes and related implications of the decisions and will pronounce on the next steps in due course,” the consortium said.

Business Day reported that it had been “reliably informed” that Dynamic TV would be heading to court citing new business rescue laws whereby a vote needed to be supported by the holders of more than 75% of creditors’ voting interests.

MultiChoice, meanwhile, said in a statement on Thursday (2 May):

“MultiChoice was approached by a BEE Consortium (Dynamic TV Consortium) for funding, for the business rescue of ODM. The MultiChoice board approved the enterprise development funding as part of the MultiChoice empowerment programme. Dynamic TV Consortium was not successful in the business rescue process. We wish Messrs Mkhari and Kekana well in all their future endeavours.

“At this stage Dynamic TV Consortium has not discussed with us what further steps they wish to take.”