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TMS` ann: Restructure

Document date:  Fri 18 Oct 2002
Published:  Fri 18 Oct 2002 19:00:13
Document No:  277988
Document part:  A
Market Flag:  N
Classification:  Other

TELEVISION & MEDIA SERVICES LIMITED           2002-10-18  ASX-SIGNAL-G

HOMEX - Sydney                                                        

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As previously announced to the market, TMS has been negotiating with
various interested parties regarding a proposed restructure.

An in-principle agreement on the restructure is part of that
negotiation.  No binding offer or acceptance has yet been made or
received.

Subject to a number of conditions, including TMS shareholder
approval, any necessary regulatory approvals and formal
documentation:

* TMS would transfer the loss making Val Morgan and MEG Australian
and New Zealand cinema advertising businesses ("Advertising
Businesses") to major creditors of the Advertising Businesses (being
the cinema exhibitors Hoyts, Greater Union and Village)
("Exhibitors") in return, particularly, for the release of existing
and future liabilities under cinema advertising agreements.

* TMS would be recapitalised and will focus on growing and developing
its profitable TV production and outside broadcasting business
through its wholly owned subsidiary, Global Television. 

* TMS will continue the review of its non-core assets, with the
proceeds from any asset sales being used to reduce TMS' bank debt.

Further details of the proposed restructure are as follows:

* A standstill agreement would be entered into, pursuant to which the
Exhibitors will agree to a moratorium on outstanding cinema rentals
and a reduction in the rentals for the period from 1 October 2002
until the restructure is completed or terminated. An interim
standstill agreement for the period from 1 October 2002 to 25 October
2002 has been agreed.

* TMS will make a rights issue, offering (at 2.5 cents per share) 5
new shares for every 2 shares currently held. For each new share
subscribed for, an option to subscribe for a TMS share exercisable
during the next 3 years at 2.5 cents per share will be granted.

* The rights issue will be jointly underwritten by PBL and TEN.

* An additional placement of $2.5m on approximately the same pricing
terms is expected to be underwritten by ANZ, which proceeds will be
used as part of the Exhibitor transactions.

* Of the $11.4m raised under the rights issue, TMS would use $10
million to reduce its bank debt.

* PBL and TEN will provide limited guarantees of TMS's obligations to
the ANZ of up to approximately $13m. If the guarantees are called on
during the next 3 years then the debt of TMS to PBL and TEN to the
extent of the call may be capitalised at the option of PBL or TEN at
2.5 cents per TMS share.

* Each of PBL, TEN and ANZ are to be granted 50 million 4 year
options to subscribe for TMS shares exercisable at 3 cents.

As would be expected, there are a number of conditions to be met for
the restructure to be implemented. Reaching an agreement which
balances the interests of all stakeholders has been and is a
difficult and complex task.

The TMS board looks forward to finalising the formal terms of the
restructure proposal and presenting it to TMS shareholders for
their consideration.