(Alliance News) - Matomy Media Group Ltd on Monday said negotiations for the sale of its Team Internet AG stake to Rainmaker Investments GmbH have stalled and are unlikely to succeed.
Shares in Matomy were down 13% at 2.00 pence in morning trade in London.
Media company Matomy owns a 90% stake in Team Internet and agreed to sell the entire stake to minority shareholder Rainmaker for USD36 million cash back in April.
Due diligence for the sale was extended in May and twice in June but no deal has been agreed and has been complicated by a claim that Matomy owes a debt to Rainmaker - which Matomy disputes.
Matomy said it is now "pursuing other potential alternatives" with other possible Team Internet buyers, "in collaboration with Rainmaker".
"Negotiations have not yet resulted in a binding offer and there is no certainty that such negotiations will result in such an offer or in a binding agreement," Matomy said.
Matomy had intended to use the USD36 million to repay bonds and has been informed by the bondholder trustee and Rainmaker that bondholder representatives are "having direct discussions£ to agree a "settlement by and between Rainmaker and the bondholders" if the Team Internet sale isn't "consummated". Matomy is not party to such talks.
On Thursday last week, Matomy posted a widened loss of USD16.6 million from USD3.4 million the year before in its first financial quarter to June 30. This was due to operating expenses and a sizeable goodwill impairment charge of USD16.0 million for domain business Team Internet because of the excess paid for the business over the fair value of Team Internet's assets.
