Live Company Regulatory News (LVCG)

16 Aug 2006 07:00

PARALLEL MEDIA GROUP PLC PROPOSED CHANGES TO BUSINESS ARRANGEMENTS IN ASIA AND RELATED MATTERS Parallel Media Group plc (the "Company" or "PMG") has today made a number ofannouncements and expects the Company's shares to be re-admitted to trading onAIM today. In summary, these announcements detail. * Proposals for the dissolution of the Company's arrangements for the current business activities operated through the company's associated company Parallel Media Asia (2003) Ltd ("PMA") which promotes five Asian golf tournaments. This would result in: * + PMG becoming the sole promoter of the UBS Hong Kong Open and the TCL Classic golf tournaments + PMG would cease to be interested in PMA and the three other Asian golf tournaments + all inter company balances due from PMA settled * PMG is seeking to raise approximately ‚£3.5 million to repay these and other loans and to provide further working capital * An extraordinary general meeting has been convened for 7 September 2006 to approve the resolution necessary to implement a fundraising. * A further announcement will be made before that meeting giving final details of the proposals. * Two new non-executive directors, Leonard Fine and Edward Adams, were appointed yesterday * The Company has today released its final results for 2005 and its interim results for the first half of 2006 * The Chairman's statement accompanying the interim results refers to continuing trading progress in the second half of 2006, good visibility of income for 2007 and the prospect of announcing new opportunities to grow PMG's core business shortly Commenting on the announcements, David Ciclitira, Chairman of PMG said:"The last few years have been very tough, but I believe that the resultsannounced show that we are now moving forward strongly. The dissolution of ourAsian joint venture, the fund raising and other matters would leave us wellplaced to drive the business forward profitably from a solid balance sheet."For further information contact:David Ciclitira Chairman, Parallel Media Group plc 020 7225 2000Abigail Singleton Conduit PR 0207 429 6606Summary of the proposalsOn 14 June 2006 Parallel Media Group plc ("PMG" or the "Company") entered intobinding heads of agreement with the other shareholders and financiers (the"Malaysian Shareholders") of its associate company, Parallel Media Asia (2003)Limited ("PMA") for a dissolution ("the "Dissolution") of the arrangements forthe business activities operated through PMA and its wholly owned subsidiary(together the "PMA Group"). This business promotes, through PMA's subsidiary,Parallel Media Golf (Asia) Limited, five PGA European Tour events held in Asia.A key condition of the heads of agreement involved PMG raising significantadditional funding by no later than 8 September 2006. As at today's date, thesefunds have not been raised in full, although progress continues to be made andthe board is hopeful that the deadline will be met. It was also subject, interalia, to regulatory approval. A total of approximately ‚£3.5m is being sought inconnection with the Dissolution and to provide the Company with additionalworking capital.In anticipation that the fundraising can be successfully completed, the Companyneeds to obtain shareholder approval to increase the authority to allot sharesfor cash. A circular has been sent to shareholders seeking their approval andan extraordinary general meeting has been convened for 7 September 2006 toapprove the resolution necessary to implement a fundraising. A furtherannouncement will be made before that meeting giving final details of theproposals.Since 2003, PMG's interests in its PGA European Tour golf tournaments held inAsia have been owned by an associated company, established with certain of theMalaysian Shareholders, in which PMG holds a minority interest. It has becomeclear to the Board over recent months that the original intentions of theestablishment of this arrangement were not being achieved and, in particular,the expansion of PMG's golfing interests in Asia and the cash flow PMG wasreceiving from the existing interests were not satisfactory.The Board also established that this arrangement was not achieving theobjectives of our partners. Accordingly, negotiations were entered into with aview to dissolving the partnership and sharing the events managed by the PMAGroup between the two groups. Notwithstanding the Dissolution, it is likelythat the two groups will work together in the future on specific projects.The principal terms of the Dissolution are that: 1. PMG would assume the rightsto promote the UBS Hong Kong Open and the TCL Classic golf tournaments, and 2.that the Malaysian Shareholders would acquire PMG's 49.975% shareholding in theissued share capital of PMA. In addition, normal trading and intercompanybalances will be settled between PMG and PMA. All shareholder agreementsbetween PMG, the Malaysian Shareholders and PMA would also be terminated atcompletion.For further information contact:David Ciclitira Chairman, Parallel Media Group plc 020 7225 2000Abigail Singleton Conduit PR 0207 429 6606ENDPARALLEL MEDIA GROUP PLC