Catalyst Media Regulatory News (CMX)

9 Feb 2007 12:45

Catalyst Media Group PLC09 February 2007 Catalyst Media Group PLC ("CMG" or the "Company") Further re SIS Dividend Policy CMG owns a 22.2% stake in Satellite Information Services (Holdings) Limited('SIS'), the leading producer of video, audio and data to over 9,700 licensedbetting offices in the UK and Ireland whose major customers include Ladbrokes,William Hill, Coral and the Tote. In the Company's Interim Statement for the six month period ended 30 September2006, the Board stated 'SIS has, in the recent past, had a policy of declaring adividend every four years. In line with this policy, the Board believes asignificant dividend from SIS will be paid in the first quarter of 2007 which,if paid will have a direct impact on profits and earnings.' On 15 January 2007, the Company announced that it had been advised by the SISboard that it is no longer the intention of SIS to pay a dividend in the firstquarter of 2007 and that the future SIS dividend policy is more likely to bethat it will pay regular annual dividends consistent with annual profits insteadof significant four yearly payments. Accordingly, the directors of CMG have been examining the implications of thatpossible change in dividend policy on its funding arrangements following the SISdecision to defer payment of an exceptional dividend. On 2 October 2006, CMG announced that it had increased its effective interest inSIS for a cash consideration of £5.5 million. In order to acquire this from TheEureka Interactive Fund Ltd ("Eureka"), CMG was contractually required to firstrepay the balance of £10.64 million to redeem the Deep Discount Bonds held byEureka. These were issued to Eureka at the time of CMG's initial acquisition ofan interest in SIS. In order to finance this transaction and the associatedcosts, CMG has drawn down £17.3 million of an £18.625 million facility("Facility") that has been arranged with Investec Bank (UK) Limited("Investec"). Under the terms of the Facility, in the event that the outstanding debt andaccrued interest due to Investec is in excess of £10 million at any time after31 March 2007, then Investec can exercise a warrant to acquire an effective 10%out of the 22.2% holding held by CMG at a nominal price, giving CMG a resultantshareholding of 12.2% in SIS. Accordingly, the Directors are actively progressing a number of refinancingopportunities in order to raise approximately £10 million by 31 March 2007. Suchfunding, which may include, either in whole or in part, an equity issue isrequired in order to safeguard CMG's interest in SIS. The board has receivedassurances from certain major shareholders that they are supportive of an equityissue at 1 pence per share and is therefore confident that appropriate fundingarrangements will be secured, although there can be no formal guarantee thatsuch will be the case. It is anticipated that the final structure of the fundingwill include an opportunity for all qualifying shareholders to participatethrough an open offer of new ordinary shares in the Company. It should be notedthat the funding arrangements with Investec are all effectively secured on theshares in SIS and no parent guarantees are involved. A further announcement will be made as appropriate. Enquiries: Michael RosenbergCatalyst Media Group plc (020) 7927 6699 James Harris & Angela PeaceStrand Partners Limited (020) 7409 3494 This information is provided by RNS The company news service from the London Stock Exchange