TMS`s ann:Completed Negotiations to Restructure BusinessOps.
Tue 24 Dec 2002
Published: Tue 24 Dec 2002 16:04:51
Document No: 284384
Document part: A
Market Flag: N
TELEVISION & MEDIA SERVICES LIMITED 2002-12-24 ASX-SIGNAL-G HOMEX - Sydney +++++++++++++++++++++++++ Television & Media Services Limited ("TMS"), announces that it has completed negotiations to restructure its business operations as follows: * TMS has transferred all of the shares in the under performing Val Morgan and MEG Australian, New Zealand and South American cinema advertising businesses ("Advertising Businesses") to major creditors of the Advertising Business (being the cinema exhibitors Hoyts, Greater Union and Village) in return for the release of existing and future liabilities under cinema advertising agreements. * As previously announced, TMS is in the process of withdrawing from the Singapore screen advertising business. In line with the restructuring of TMS, a decision has been made to similarly withdraw from the Hong Kong screen advertising business immediately. * TMS has entered into the following agreements with its bankers, ANZ, as well as its major shareholders, PBL and TEN, to restructure TMS's remaining core production and broadcasting business: * ANZ, PBL and TEN have each agreed to subscribe for TMS shares at 2.5 cents to the total value of $13.9 million. * PBL and TEN have provided limited guarantees of TMS's obligations to the ANZ of up to approximately $13 million. If the guarantees are called on during the next 3 years then the debt of TMS to PBL and TEN may be capitalised to the extent of the call at the option of PBL or TEN at 2.5 cents per TMS share. * TMS has agreed to grant each of PBL, TEN and ANZ 50 million 4 year options to subscribe for TMS shares exercisable at 3 cents. The above agreements are all subject to TMS shareholder approval and any necessary regulatory approvals. * TMS will make a rights issue to all shareholders offering (at 2.5 cents per share) 5 new shares for every 2 shares currently held. The terms of the rights offer have changed from the proposal previously announced. This reflects TMS's change in circumstances and the agreement by major shareholders to participate in the rights offer. TMS considers that the revised terms offer TMS, and consequently its shareholders a potential for greater returns. * The rights issue will not be underwritten, however PBL, TEN and CPH have entered into agreements with TMS committing to take up their rights under the rights offer. * The shares offered under the rights issue will not have attached options to subscribe for further shares. * TMS intends that the rights issue prospectus and an explanatory memorandum in respect of the rights issue and recapitalisation will be sent to TMS shareholders for their consideration in the first calendar quarter of 2003. The TMS board looks forward to finalising the restructure and recapitalisation with the support of TMS shareholders.