The shareholders and creditors of troubled pay-television operator On Digital Media, which owns TopTV, have approved a business rescue plan that involves an offer by China’s StarTimes to purchase a direct 20% stake.
The required majority of creditors and shareholders voted in favour of the plan during a meeting convened by TopTV on Tuesday. More than 99% of shareholders, which include the Industrial Development Corp, Development Bank of Southern Africa, the National Empowerment Fund and European satellite operator SES, voted in favour of the rescue plan presented.
The move means two separate submissions of interest, one by a consortium led by black-owned media group MSG Afrika and the other by Kenya’s triple-play broadband and pay-TV operator Wananchi Group, have been rejected in favour of the Chinese-led proposal.
Wananchi Group submitted a bid to buy the embattled pay-TV operator on Monday night. A day earlier, a South African consortium led by MSG Afrika made a bid of its own backed by a R500m “soft” loan from TopTV rival, MultiChoice.
These bids follow the original expression of interest from StarTimes, which will now acquire the maximum 20% stake in TopTV allowed for under the Electronic Communications Act. Foreign ownership in the sector is capped to 20% under South Africa’s constitution.
TopTV owes creditors and shareholders about R1,5bn, according to documents seen by TechCentral.
Earlier this month, TopTV said it was stopping broadcast of two of its channels, Top Movies +24 and Top Junior. In December 2012, the broadcaster lost three other channels, Showtime, Silver and Star. Loss of the channels came after the company filed for a “business rescue” under the Companies Act in October 2012 and it has since been looking for an equity partner to help it settle its debts.
The bulk of TopTV’s debt consists of claims from shareholders, but the company also owes substantial amounts to content suppliers. Top of the list is Fox International, which is owed R43,8m, or 3% of TopTV’s total debt. Next is Warner at R25,4m, for 1,7% of the total. Paramount is owed R13,1m, while Manchester United Television is owed R9,5m.
TopTV also owes Walt Disney an amount of R7,2m and Turner R6,4m.
Peter van den Steen, TopTV’s appointed business rescue officer, said the newly adopted business plan was now binding on the company, on each of the creditors and every shareholder. — (c) 2013 NewsCentral Media
- Image: Harsh Patel/Flickr