TIDMPTV
RNS Number : 3531H
PeerTV PLC
30 November 2015
30 November 2015
PeerTV plc
("PeerTV" or "the Company")
Offer to Loan Noteholders of Digitek SMT Assemblies Limited
PeerTV plc (AIM:PTV), a provider of technology solutions for the
OTT (TV over the internet) market, and PCB (printed circuit board)
production solutions announces a proposed restructuring of the
Secured Loan Notes issued by Digitek SMT Assemblies Ltd
("Digitek").
Digitek is engaged in the assembly of products and components
and the associated sourcing and logistics for companies principally
engaged in the hi-tech, telecommunications, medical and other
technology based industries in Israel. For the first six months of
2015 Digitek contributed $670,000 sales, out of the group total for
the period of $970,000.
An offer has been submitted to the Noteholders of Digitek ("the
Noteholders") to exchange 100% of the Loan Notes in issue for 70%
of the Ordinary Share Capital of Digitek ("Revised Exchange
Offer"). It has been made in light of:
a) Weaker than expected operating results of Digitek during Q2 and Q3 2015
b) Digitek's inability to finance itself. Turnkey orders have
been obtained, but the financing facilities needed to support them
have not been put in place.
c) PeerTV's decision to no longer support the Digitek business.
An earlier proposal was submitted to the Noteholders on 19(th)
October 2015. It was considered and approved by a majority of the
Noteholders at a meeting held on 2(nd) November 2015. However, it
failed to gain the necessary 75% approval. This made it necessary
the Revised Exchange Offer to be submitted.
The Company has been in dialogue with a number of the larger
Digitek Noteholders. It has communicated the financial situation of
Digitek and discussed the Revised Exchange Offer which has resulted
in a general conclusion that the Exchange Offer is the best
proposal to try to preserve value for both PeerTV and the
Noteholders.
Digitek is currently a wholly owned subsidiary of Digitek
Holdings Limited ("DHL") which is 64.1% owned by PeerTV. Under the
terms of the Exchange Offer there would be a debt for equity swap
by Noteholders who are owed approximately GBP1.9 million and also
by PeerTV which has advanced approximately GBP2.6 million directly
to Digitek on an unsecured basis ('the PeerTV Advance") over the
past three years.
The following points should be noted:
a) Following the transaction PeerTV will hold 10% of the
Ordinary Share Capital. The Noteholders would hold 70% of the
Ordinary Share Capital and the remaining 20% would be held by an
Israeli company also involved in the industrial assembly sector
with which Digitek is developing a strategic partnership. That
company will be providing funds for working capital. In addition,
certain Noteholders will advance GBP50,000 by way of a loan.
b) PeerTV's acquisition of 10% of the capital would be achieved
through the conversion of the PeerTV Advance to Ordinary Share
Capital and the write off of the remainder. The actual amount of
the write off is dependent on the valuation of Digitek agreed
between the parties at the time of the transaction.
c) The new equipment acquired for the Digitek business earlier
in 2015 at a cost of about $500,000 will continue to be owned by
PeerTV Marketing Limited which is a 100% subsidiary of PeerTV. The
equipment will be leased to Digitek under the terms of a monthly
agreement, on an arm's length basis which fairly reflects the
value, age and condition of that equipment. At end of the term
ownership of the equipment will be transferred to Digitek.
d) It is expected that the release of pledges on the assets of
Digitek will permit new lenders to advance secured funds.
If concluded, under the AIM Rules the Exchange Offer will be a
substantial transaction requiring the disclosures set out in
Schedule 4 of the AIM Rules. The profits attributable to the assets
being disposed of, the book value of those assets and the effect on
the PeerTV of the transaction can be seen from the attached
pro-forma based on the interim unaudited financial statements for
the six months ended 30 June 2015. For the foreseeable future
PeerTV intends to hold its shareholding in Digitek.
Following the transaction PeerTV will hold 100% of both PeerTV
Limited (operating the OTT business) and PeerTV Marketing Limited
(owning the equipment). It will also hold 10% of Digitek and 64.1%
of DHL, which shall be no longer active.
A General Meeting of Noteholders to vote on the proposed
Exchange Offer will be held in London on 15(th) December 2015.
Further enquiries:
PeerTV Plc
Eitan Yanuv, Chairman
Tel: +972 974 07315
ZAI Corporate Finance Limited
Tim Cofman / Jamie Spotswood
Tel: +44 20 7060 2220
Daniel Stewart & Company plc
David Coffman
Tel: +44 207 776 6550
PEERTV PLC
CONSOLIDATED PROFORMA PROFIT & LOSS - SIX
MONTHS ENDED 30 JUNE 2015
Combined Digitek Adjusted
$ $ $
Sales 970 670 300
Direct Costs 1,024 816 208
Gross Profit -54 -146 92
Operating
Expenses 1,299 385 914
Operating
Loss -1,353 -531 -822
Finance 655 357 298
-2,008 -888 -1,120
Minority Interest 408 408 0
Net Loss -1,600 -480 -1,120
========= ======== =========
CONSOLIDATED PROFORMA BALANCE SHEET
AT 30 JUNE 2015
Combined Digitek Adjusted
$ $ $
Fixed Assets 1,224 810 414
Intangible Assets
- Digitek Holdings 1,603 0
Intangible Assets
- Assemblies 186
Preference Shares
- Assemblies 0
Current Assets 1,478 512 966
Total Assets 4,305 1,323 0 1,566
--------- -------- ---------
Current Liabilities 9,832 3,310 6,522
Non-Current Liabilities 80 0 80
Total Liabilities 9,912 3,310 0 6,602
Shareholders
Equity -5,607 -1,464 -5,036
4,305 1,846 0 1,566
========= ======== =========
This information is provided by RNS
The company news service from the London Stock Exchange
END
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