1 Mar 2019 07:30
1 March 2019
7digital Group plc
("7digital" or "the Company")
7digital agrees terms for settlement with MediaMarktSaturn over Juke service
7digital (AIM:7DIG), the global leader in B2B end-to-end digital music solutions, announces that, further to the Update of 4 January 2019, it has reached a Settlement Agreement (the "Agreement") with Juke Entertainment Gmbh ("Juke"), a wholly owned subsidiary of Media-Saturn-Holding GmbH ("MediaMarktSaturn", together "The Parties").
Under the Agreement, 7digital has accepted settlement of, and release from, all outstanding contracts and commitments relating to the Juke music service for an immediate payment by Juke of €4,000,000. Further, Juke has agreed to write off all interest payments and £250,000 of the principal amount of the convertible loan note issued to Juke (as announced on 26 October 2018). 7digital will pay the balance of the convertible loan note principal amount, £500,000, from the proceeds of the Agreement. The net proceeds of the termination payment will be applied for general corporate purposes.
The Company has also agreed to use its best endeavours to ensure an orderly sale of MediaMarktSaturn's shareholding in 7digital.
7digital will update the market on the effect of this settlement on the outturn for financial year 2018 in the coming weeks, following consultation with auditors.
Related Party Transaction
At the date of this Announcement Juke holds 48,238,955 Ordinary Shares (representing approximately 11.5 per cent. of the issued share capital of the Company). The Agreement is therefore deemed to be a related party transaction for the purposes of Rule 13 of the AIM Rules.
The Directors consider, having consulted with the Company's Nominated Adviser, Arden Partners, that the terms of the Agreement are fair and reasonable in so far as the Company's shareholders are concerned.
Simon Cole, CEO, commented:
"I am extremely pleased to put this period of uncertainty behind us. Whilst we would have preferred not to have been in this position, we are very satisfied with the settlement which represents the full value of all future financial commitments by Juke. The immediate injection of cash will allow us to restructure our overhead base and reposition the company for continued growth. We have had a good start elsewhere to the current financial year and will update shortly on our recent contract wins."
For further information please contact:
7digital | 020 7099 7777 |
Simon Cole, Chief Executive |
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David Holmwood, Interim Chief Financial Officer Holly Ashmore, PR Manager |
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Arden Partners (nominated adviser and broker) |
020 7614 5900 |
Ruari McGirr/ Tom Price/ Benjamin Cryer - Corporate Finance
Yellow Jersey PR Georgia Colkin Charles Goodwin 7digital@yellowjerseypr.com
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+44 (0)7825 916 715 +44 (0)7747 788 221 |
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About 7digital (http://about.7digital.com/)
7digital is the global leader in B2B end-to-end digital music solutions. The core of its business is the provision of robust and scalable technical infrastructure and extensive global music rights used to create music streaming and radio services for a diverse range of customers - including consumer brands, mobile carriers, broadcasters, automotive systems, record labels and retailers. 7digital also offers radio production and music curation services, editorial strategy and content management expertise.
7digital fosters industry growth and innovation by simplifying access to music for clients such as Onkyo and TikTok (formerly musical.ly). From years of being the largest independent producer of programming for the BBC and powering services for partners like Panasonic, TDC and Fender, 7digital is perfectly positioned to lead innovation at the intersection of digital music and next-generation radio services.