Times Media Group has continued shedding assets and streamlining its operations, on Monday announcing that it has reached an agreement to sell Nu Metro, South Africa’s second largest cinema chain after Ster-Kinekor, to private equity firm One Fifty Capital.
The deal, which includes Nu Metro sister company Popcorn Cinema Advertising Sales, involves the sale of the assets to a new, purpose-built company, Subcocept, funded by One Fifty. Popcorn Advertising sells on-screen ad space for Nu Metro and other cinemas.
One Fifty Capital provides capital for small and medium start-up enterprises in property, education, entertainment and gaming. It has offices in KwaZulu-Natal and in Cyprus.
Times Media, which owns newspaper assets such as Business Day and the Sunday Times, as well as website Times Live, tells shareholders that the sale of Nu Metro is in line with its strategy to offload noncore assets. This includes the sale last year of retailer Exclusive Books.
Nu Metro operates 17 cinema complexes with 162 screens in South Africa, making up a third of cinema market share.
Times Media is selling Nu Metro and Popcorn for R75m in cash, R50m of which will be paid on the implementation of the transaction. A further R15m will be paid on the first anniversary of the deal and a further R10m on the second anniversary.
It will use the proceeds of the sale to “reduce acquisition leverage with respect to future acquisitions more aligned to Times Media Group’s core business”.
Times Media has previously sold other cinema assets, including its 51% shareholding in Monte Cinemas to Tsogo Sun Casinos for R20m in cash. It also sold its 50% share in Three Groups Cinemas to Whitehorse Investments and Avalon Three Groups Investments for R18m in cash. — (c) 2013 NewsCentral Media