Update on TrainFX Disposal and Debt Funding
March 17 2009 - 3:00AM
UK Regulatory
TIDMVMG
RNS Number : 9327O
Vision Media Group (Intl) PLC
17 March 2009
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| Press Release | 17 March 2009 |
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Vision Media Group (International) plc
("VMG" or "the Company")
Update on TrainFX disposal and debt funding
Vision Media Group (International) plc (AIM:VMG), the outdoor media contractor,
announces that it is in advanced negotiations for the sale of its TrainFX
("TrainTV") business to New Planet Investments Ltd. ("NPI"), the special purpose
vehicle established to acquire TrainTV from VMG.
The new Heads of Terms, signed on 13 March 2009, provides NPI with an option to
acquire 100 per cent. (previously 75 per cent.) of the TrainTV business at an
overall enterprise value of between GBP2.1 million and GBP2.6 million. NPI will
be supported in this transaction by AIM-listed RAM Investment Group Plc ("RAM")
who will have an option to acquire NPI at the same time that NPI acquires
TrainTV.
The terms of the agreement for this transaction will be satisfied by NPI paying
VMG the sum of GBP100,000 per month for a total of 15 months, commencing on 27
March 2009. In addition, should RAM take up the option to acquire NPI, RAM will
pay VMG GBP150,000 in cash on completion and will issue GBP300,000 of RAM shares
(5,454,545 shares) to VMG at 5.5 pence. RAM will also issue two Loan Notes to
VMG, one for GBP300,000 redeemable on the third anniversary of the closing of
this transaction and one for GBP150,000 redeemable on the sixth anniversary.
In view of the timing of the closure of the transaction in these unprecedentedly
difficult economic times, NPI has provided VMG with a non-refundable GBP300,000
over the past three months by way of contributions to the working capital of the
TrainTV business. RAM has also provided a GBP200,000 loan facility ("the Loan")
to VMG. The first two tranches of the Loan were made available to VMG on 24
February 2009 (GBP70,000) and 9 March 2009 (GBP80,000) respectively. The Loan
will carry a 12 per cent. interest charge, redeemable in 12 months time in the
event that the transaction does not complete for any reason. In the event that
the sale proceeds as contemplated then the Loan will be extinguished and any
amount of interest due on the Loan will be waived by RAM.If for any reason NPI
is unable to complete this transaction, then the GBP500,000 invested into VMG by
NPI and RAM to date will be converted into shares in TrainTV pro rata to the
current GBP2,100,000 base valuation (23.8 per cent. of the equity). It is
envisaged that this transaction will complete in second quarter of 2009.For the
year ended 31 December 2007 Train TV made a loss of GBP561,612 on Turnover of
GBP34,169. As at 31 December 2007 it had Net Liabilities of GBP1,630,646.
Mike Cottman is the only director of VMG with a holding in NPI and, as Executive
Chairman of VMG, the disposal is also a related party transaction under the AIM
Rules. The Directors (other than Mike Cottman), having consulted with Seymour
Pierce Limited, consider the disposal to be fair and reasonable insofar as
shareholders are concerned and in the best interests of the Group and its
shareholders as a whole.The Disposal of TrainFX will be conditional on the
consent of shareholders at a general meeting.
Dominic Brookman, Chief Executive Officer of VMG, said: "We are delighted to be
in a position to finally bring this deal to completion. The combination of NPI,
supported by RAM, is a good solid platform for our TrainTV business to be able
to grow and flourish and receive the total focus, both financially and
operationally, that it deserves so that it can deliver its full potential."
In view of the extreme length of time involved in reaching the position where
the TrainTV sale could be completed, during the past few weeks VMG has raised
additional funding via existing family and friends, executive management and new
investors injecting loans to the value of GBP225,000 into the Company. These
loans carry a 100 per cent. premium and are scheduled to be repaid on 30 June
2009.
In addition to this, in order to ensure that the Company has remained properly
financed at all times, Executive Chairman, Mike Cottman, has increased his
existing loan account with the Company by injecting a number of new loans to a
total value of GBP542,477 over the past few months and the Board has approved a
variety of premia to facilitate these loans, all of which reflect the urgent
nature of these funding requirements. Mr. Cottman's loan account, including all
capital sums invested, assorted premia and accumulated interest, now stands at a
total of GBP1,850,000 and reflects the Company's failure to repay loans as
previously agreed. Repayment of these loans will start in 2009 at such time as
the Company can afford to commence repayments.
Eric Anstee, Non-Executive Director, said: "In view of the extreme financial
circumstances that we and many other companies have found ourselves in during
these challenging financial markets it has not always been possible to find
traditional financing methods at costs acceptable to the Company and
shareholders at the critical times when finance has been required over recent
months.
"These challenges and the delay we experienced with installing the planned
number of new digital panels in the important pre-Christmas period have
resulted in a shortfall in our forecast income. This, in turn, has meant that
we have had to resort to Mr Cottman once again to provide us with more working
capital and at commercial rates which reflect these extreme circumstances. Mr.
Cottman's loans and premia are subordinated to the Company's senior debt
facility and will be repaid in the months and years to come as and when the
Company's cash flow position is able to support any such payments. We are most
grateful for Mr. Cottman's continued support in this regard.
"In addition to Mr. Cottman's support, a number of senior executives have had to
provide personal guarantees to certain key lenders to the business and the Board
has agreed to pay a commitment fee for these guarantees which has also been
structured by way of a loan and associated premia on the loan and reflects the
degree of risk that these individuals have put themselves in whilst the Company
trades through these critical few months. These commitments will be reviewed on
a six monthly basis and any associated premium payments will only be made at
such time as the Company's cash flow position and other debt commitments will
permit."
- Ends -
For further information:
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| Vision Media Group (International) plc | |
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| Dominic Brookman, CEO | Tel: +44 (0) 203 206 0001 |
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| dominicb@visionmediagroupplc.com | www.visionmediagroupplc.com |
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| Seymour Pierce Limited | |
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| Stuart Lane / John Depasquale, Corporate | Tel: +44 (0) 20 7107 |
| Finance | 8000 |
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| stuartlane@seymourpierce.com | www.seymourpierce.com |
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Media enquiries:
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| Abchurch | |
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| Henry Harrison-Topham / Jack Ballantyne | Tel: +44 (0) 20 7398 |
| | 7714 |
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| jack.ballantyne@abchurch-group.com | www.abchurch-group.com |
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This information is provided by RNS
The company news service from the London Stock Exchange
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