MUL`s: Additional Information in re: Transactions with ANZ
Thu 26 Sep 2002
Published: Thu 26 Sep 2002 16:42:14
Document No: 195365
Document part: A
Market Flag: N
MULTIEMEDIA LIMITED 2002-09-26 ASX-SIGNAL-G HOMEX - Melbourne +++++++++++++++++++++++++ Following discussions with the Australian Securities and Investments Commission, the Company has determined it is now appropriate to provide the market with additional information in relation to the transactions between Australia & New Zealand Banking Group Limited (ANZ) and the Company. We have advised previously that the Company entered into a Marketing Agreement with ANZ, and an Equity Agreement that resulted in the ANZ being issued 47,315,769 shares in the Company. Under the Equity Agreement ANZ committed to pay any shortfall in minimum revenues from the product up to an amount that it was estimated would have been generated by 10,000 users, amounting to contingent payments to the Company for three years of a maximum amount of $1,800,000 per annum. In July, 2001, ANZ and the Company varied the terms of the Equity Agreement and entered into a 4 year loan agreement for an amount of $3,000,000, where interest was capitalised until September 2003. The terms of the marketing arrangement were not altered. ANZ continued to market the products supplied under the Marketing Agreement and ANZ included the products in their offerings to small business customers. The effect of the variation to the Equity Agreement in July, 2001, was that ANZ would continue its marketing, but would no longer be obliged to make up any shortfall in revenue for years 2 & 3 of the arrangement. In exchange for the release of ANZ's contingent penalty obligation, the Company had access to funds significantly earlier than it may have received the contingent penalty payments. This enabled the Company to acquire revenue generating businesses, which now form the core of the Company's business operations. At the time of the variation, it was anticipated that the revenues contemplated under the marketing arrangement would nevertheless be generated, however, this has not come to fruition to date. The effect of this has been recorded in the recently released Form 4B, Preliminary Final Report. The Company has been in discussions with ANZ for a period of time in relation to these transactions and the parties have reached agreement in principle to settle the transactions. As a result of the proposed settlement, the parties will exchange settlement amounts, which will result in a net outflow of funds from the Company of $600,000, and the loan will be extinguished through bringing forward the remaining minimum revenue commitments. Following completion of the settlement of the transactions, the marketing arrangements with ANZ will cease. A condition precedent to the completion of the settlement is placement at a price of 1 cent each of 35,486,827 shares which would be held by ANZ upon exercise of an option agreement disclosed to the market on 3rd October, 2001. The parties anticipate completing the settlement prior to 1 October, 2002. If this does not occur, the Company would not be fully compliant with the terms of its loan facility with ANZ, entitling ANZ to exercise its rights under the loan agreement. In this regard, ANZ has not indicated it will take this course of action and in the event of completion not taking place the Company would enter into further discussions with ANZ with regard to the loan facility. The outcome of the restructurings of arrangements with ANZ (including the proposed settlement) is that the Company will have received $3,900,000, ahead of the scheduled payment times for the contingent penalty payments, effectively gaining early access to funds which were contingent in nature. Mr Adrian Ballintine, Chief Executive Officer & Group Managing Director, who is presently offshore pursuing the Company's business interests, advises that overall the transactions have been positive for the Company. The directors will keep the market informed of developments in this matter. For additional information please contact: Mr Adrian Ballintine, Chief Executive Officer & Group Managing Director on (03) 9603 3200, or by email at email@example.com.