TIDMPTV
RNS Number : 1009K
PeerTV PLC
23 December 2015
23 December 2015
PeerTV plc
("PeerTV" or "the Company")
Offer to Loan Noteholders of Digitek SMT Assemblies Limited
("Digitek")
On 15 December 2015, 73% of the votes cast at a meeting of the
secured loan noteholders of the Company's 64.1% owned subsidiary,
Digitek, (the "Noteholders) supported a resolution to effect a debt
to equity restructuring of Digitek. Therefore, the restructuring
was not approved as this fell marginally short of the 75% majority
required to pass the resolution.
Following subsequent dialogue with certain, larger Noteholders,
the board of Digitek believe that a debt to equity restructuring
would now be approved and in the absence of any other offers or
alternatives have called a further and final meeting of the
Noteholders to be held on Tuesday, 12 January 2015.
Accordingly a circular dated 22 December 2015, has been sent to
the Noteholders to approve the following actions:
-- To convert the secured loan notes in issue into 70 per cent.
of the issued share capital of Digitek
-- That the security agent (being Charles Street Securities
Europe LLP) release the debenture and all charges created in favour
of the secured loan noteholders at the time of the issue of
securities in the exchange offer and release Digitek from all
liabilities and any further obligations to the Noteholders.
Terms of the Proposed Restructuring
The terms of the proposed restructuring are summarized
below:
1. TZ Technologies Limited ("TZT"), which is an manual assembly
outsource supplier, based in the north of Israel, will invest
GBP100,000 in Digitek in order to finance the company's operational
costs with effect from 1st January 2016. In addition, TZT will
provide further amounts of up to GBP100,000 during the first year
following the agreement in order to meet the cash flow requirements
of Digitek. As consideration TZT will be allocated 20% of the
shares of Digitek.
2. PeerTV has agreed to write off the net inter-company balances
between Digitek and other companies in the PeerTV Group. PeerTV
will hold 10% of the shares of Digitek.
3. A number of individual Noteholders will provide a loan of
GBP50,000 to Digitek. Interest on these loans will be charged at
the annual rate of 6% and repayments of capital and accrued
interest will be made in ten equal monthly instalments commencing
12 months from the date on which such loans are advanced, or such
other terms as may be agreed by the board and the lenders. Such
funds to be received by 22 January 2016.
4. Subject to the acceptance of all other conditions, Amir
Levit, the proposed General Manager will invest GBP25,000 into the
business for a share of the equity, pro rata to TZT.
5. The management team of Digitek will, conditional upon the
achievement of specific milestones including Digitek achieving
annual operating profits of over 1 million NIS, be issued options
over 15% of the enlarged share capital of Digitek over a three year
period.
It is expected that the release of pledges on the assets of
Digitek would permit new lenders to advance secured funds.
Effect on PeerTV
Following the transaction PeerTV will hold 10% of the Ordinary
Share Capital of Digitek. PeerTV's holding would result from the
conversion of the PeerTV loans to equity in Digitek and it writing
off of the remainder of the loans. The actual amount of the write
off is dependent on the valuation of Digitek agreed between the
parties at the time of the transaction.
The new equipment acquired by PeerTV for Digitek 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.
Alternative to the exchange offer
The board of Digitek believe that Digitek will be unlikely to
continue trading without an injection of capital. If the exchange
offer is not approved the board of Digitek will have to either
appoint administrators or carry out a fire sale of the
business.
Given that the board of Digitek are not in receipt of any firm
offers for the business at the moment, liquidation would appear the
most likely outcome if the Exchange Offer is not accepted by the
required majority.
In the event of Digitek defaulting on its obligations under the
terms of rental agreements for premises occupied, PeerTV as
guarantor will have to meet all or part of that obligation which is
currently estimated at least GBP100,000.
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 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.
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
OF PEER TV AT 30 JUNE 2015
Adjusted
$
Fixed Assets 414
Intangible Assets
- Digitek Holdings 0
Intangible Assets
- Assemblies 186
Preference Shares
- Assemblies 0
Current Assets 966
Total Assets 1,566
--------- -------- ---------
Current Liabilities 6,522
Non-Current Liabilities 80
Total Liabilities 6,602
Shareholders
Equity -5,036
Total Liabilities
& 1,566
========= ======== =========
Shareholders
Funds
This information is provided by RNS
The company news service from the London Stock Exchange
END
STRTJBFTMBITBPA
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December 23, 2015 11:49 ET (16:49 GMT)
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