The Business Rescue Practitioner (BRP) for On Digital Media (ODM), parent company of pay-television operator TopTV, says it will proceed with a current rescue plan which would see Chinese firm StarTimes acquiring a 20% stake in the group.
This comes after Dynamic TV Consortium, a broad-based consortium led by Given Mkhari of MSG Afrika Media and Malose Kekana of Falk Trading, confirmed that it has submitted an alternative plan for the business rescue of ODM.
On 29 October 2012, ODM resolved to commence business rescue proceedings after experiencing financial distress for an extended period of time.
The locally based consortium also noted that rival operator to TopTV, MultiChoice approved funding of R500 million, “for the purposes of implementing a credible business rescue plan and securing the on-going sustainability of ODM”.
StarTimes, meanwhile, aims 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%.
ODM released a statement late on Monday afternoon (29 April)
“The Business Rescue Practitioner (BRP) would like to confirm that we have since received unsolicited, non binding expressions of interest from two other interested parties. It is the intention of the BRP to go ahead and present the current plan as published.
“As part of that process, he has an obligation to announce to the meeting the receipt of the additional proposals which cannot be viewed as plans under the current circumstances.”
It is understood that a voting for the offer from StarTimes for TopTV is expected to take place on Tuesday (30 April).
ODM also moved to correct an impression created by an article in Business Day that StarTimes intends investing R100 million against the R400 million by the Mkhari/Kekana consortium.
“The published investment as per the proposed business rescue plan is in excess of R1billion,” it said.
Startimes says it started developing its African markets in 2002, and was issued the first digital TV operator license by Rwanda in 2007.
Currently the group has licenses and registered companies in 10 African nations including: Nigeria, Tanzania, Uganda, Rwanda, Burundi, and Republic of central Africa, Guinea and Kenya.
According to ODM, StarTimes has offered to pay R30 million to TopTV’s main backer, the Development Bank of Southern Africa (DBSA) and offer it an equity opportunity of 1.99% of the issued share capital in NEWCO.
ODM is believed to owe the DBSA in excess of R200 million. It says the secured portion of the DBSA’s claim will be discharged in full for R50.82 million.
The Chinese firm will also pay R37.5 million to all creditors, outside of the DBSA, escalating by an amount of R2.50 per month from 1 June until the implementation date.
The group would also look to settle with preference shareholders of ODM, who have claims against the company, aswell as all other shareholders.
TopTV’s main shareholders include the Industrial Development Corporation (IDC); First National Media; Kopano Ke Matla (Cosatu’s investment arm); National Empowerment Fund; and satellite business SES.