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TIMES MEDIA GROUP LIMITED - Disposal of interests in Monte cinemas and Suncoast cinemas

Release Date: 25/06/2013 16:50
Code(s): TMG     PDF:  
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Disposal of interests in Monte cinemas and Suncoast cinemas

TIMES MEDIA GROUP LIMITED
(Formerly Richtrau No. 229 Proprietary Limited)
(Incorporated in the Republic of South Africa)
(Registration number 2008/009392/06)
Ordinary Share Code: TMG
Ordinary share ISIN: ZAE 000169272
(“TMG” or “the Company”)

DISPOSAL OF INTERESTS IN MONTE CINEMAS AND SUNCOAST CINEMAS

1.     DISPOSAL OF 51% OF MONTE CINEMAS

1.1.   Shareholders are advised that the Company, through its
       wholly-owned subsidiary Avusa Entertainment Investments
       Proprietary Limited (“Times Media”), has entered into an
       agreement with Tsogo Sun Casinos Proprietary Limited (“the
       Purchaser”), Nu Metro Filmed Entertainment Proprietary
       Limited (“Nu Metro Filmed Entertainment”) and Monte Cinemas
       Proprietary Limited   (“Monte Cinemas”) in terms of which
       Times Media has disposed of its 51% shareholding in and all
       claims of whatsoever nature against Monte Cinemas to the
       Purchaser for a total purchase consideration of R20 million
       (“the Monte Disposal”).

1.2.   In addition    to the Monte Disposal, the Company is also in
       the process   of disposing of Nu Metro Cinemas. It should be
       noted that    the Monte Disposal does not form part of the
       disposal of   Nu Metro Cinemas.

2.     RATIONALE FOR MONTE DISPOSAL

2.1.   As part of TMG’s turnaround strategy, it has specifically
       decided to exit non-core businesses identified within TMG.
       One such business is Monte Cinemas, which falls within the
       Company’s entertainment division and which forms the
       subject matter of the Monte Disposal.

2.2.   Monte Cinemas provide film entertainment and related
       services to the South African market and as such, is not
       aligned to TMG’s core businesses, being media and retail
       solutions.

2.3.   In terms of the Monte Disposal, Times Media’s co-
       shareholder in Monte Cinemas elected to exercise its pre-
       emptive right and acquire Times Media’s entire shareholding
       in Monte Cinemas. Therefore the Monte Cinemas will not form
       part of the Nu Metro Cinema disposal process.
3.     DETAILS OF THE MONTE DISPOSAL

3.1.   Purchase Consideration

3.1.1.   Times Media will dispose of its 51% shareholding in and
         all claims of whatsoever nature against Monte Cinemas
         (“the Monte Equity”) to the Purchaser for a total
         purchase consideration of R20 000 000, payable in cash on
         the effective date of the Monte Disposal, against
         delivery of the Monte Equity.

3.1.2.   The proceeds of the Monte Disposal will be used to reduce
         gearing and for potential future acquisitions more
         aligned to TMG’s core business.

3.2.   Effective Date

3.2.1.   The effective date of the Monte Disposal is 28 June 2013,
         being the 3rd business day following the date of
         signature of the Monte Disposal agreement by the last
         party signing (“the Effective Date”).

3.2.2.   The Monte Disposal is not subject to the fulfilment of
         any suspensive conditions.

3.3.   Other significant terms

       Following   the  implementation   of  the   Monte  Disposal
       agreement the Purchaser will own 100% of the issued shares
       in Monte Cinemas and the current shareholders' agreement in
       respect of Monte Cinemas, the current management agreement
       in terms of which Monte Cinemas appointed Nu Metro
       Theatres, then a division of Nu Metro Filmed Entertainment,
       to manage the business and affairs of Monte Cinemas and the
       intellectual property licence agreement in terms of which
       Nu Metro Filmed Entertainment granted Monte Cinemas the
       right to use the name and trademark "Nu Metro" and
       associated logo, in relation to the business of Monte
       Cinemas will be cancelled ipso facto with effect from the
       Effective Date.

4.     MANAGEMENT AGREEMENT

       Times Media Proprietary Limited will continue to manage the
       business operated by Monte Cinemas following the conclusion
       of the Monte Disposal in terms of a new management
       agreement in terms of which (i) Times Media Proprietary
       Limited shall render certain services to Monte Cinemas with
       effect from the Effective Date and (ii) Times Media
       Proprietary Limited shall grant to Monte Cinemas a non-
       exclusive, royalty-free licence to use the "Nu Metro" trade
       mark in connection with the business of Monte Cinemas for
       the duration of the new management agreement.

5.     FINANCIAL EFFECTS OF THE MONTE DISPOSAL

       In terms of the JSE Listings Requirements the financial
       effects of the Monte Disposal are not significant and are
       below the reporting threshold.

6.     MONTE DISPOSAL CATEGORISATION AND RELATED PARTY TRANSACTION

6.1.   The Purchaser holds 49% of the total issued share capital
       of Monte Cinemas and as such, is a material shareholder in
       Monte Cinemas. The Purchaser is therefore viewed as a
       related party in terms of the Listings Requirements of the
       JSE Limited (“JSE”) and the Monte Disposal is therefore
       viewed as a related party transaction.

6.2.   Due to the size of the Monte Disposal, the Monte Disposal
       is categorised as a small related party transaction in
       terms of the JSE Listings Requirements. Accordingly,
       shareholder approval is not required in order to implement
       the Monte Disposal and this announcement is for information
       purposes only.

7.     MONTE DISPOSAL INDEPENDENT EXPERT VALUATION

7.1.   In terms of section 10.4(f) of the JSE Listing Requirements
       the Company has appointed PSG Capital as the independent
       expert in order to provide an opinion on the fairness of
       the Monte Disposal insofar as the shareholders of the
       Company are concerned. Based on the opinion provided, the
       board of TMG has found the Monte Disposal to be fair to
       shareholders.

7.2.   The said fairness opinion has been approved by the JSE and
       will lie open for inspection at the Company’s registered
       office for a period of 28 (twenty eight) days from the date
       of this announcement.

8.     DISPOSAL OF 50% OF SUNCOAST CINEMAS

8.1.   In addition to the Monte Disposal, Times Media has also
       disposed of its 50% shareholding in Three Groups Cinemas
       Proprietary Limited (“Suncoast Cinemas”) to Whitehorse
       Investments Proprietary Limited and    Avalon Three Groups
       Investments Proprietary Limited, the other shareholders of
       Suncoast   Cinemas   in   equal   shares   (“the   Suncoast
       Disposal”)for a total consideration of R17 million. The
       Suncoast Disposal does not require shareholder approval and
       is disclosed to shareholders herein for information
       purposes only.

8.2.   Suncoast Cinemas also provides film entertainment and
       related services to the South African market and as such,
       is similarly not aligned to TMG’s core businesses as
       described above.

8.3.   In terms of the Suncoast Disposal, TMG’s co-shareholder in
       Suncoast Cinemas elected to exercise its pre-emptive right
       and acquire Times Media’s entire shareholding in Suncoast
       Cinemas.

8.4. It should be noted that the Suncoast Disposal does not form
     part of the disposal of Nu Metro Cinemas referred to above.



By order of the board

25 June 2013
Johannesburg

Sponsor:   PSG Capital Proprietary Limited

Legal Advisor: Edward Nathan Sonnenbergs Inc.

Date: 25/06/2013 04:50:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
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