RAM.L Regulatory News (RAM)

7 May 2009 07:00



Vision Media Group (International) plc

("VMG" or "the Company")

TrainFX Disposal

Further to the announcement made on 17 March 2009, Vision Media Group (International) plc (AIM:VMG), the outdoor media contractor, announces that it has agreed new Heads of Terms for the sale of its TrainFX ("TrainTV") business directly to AIM-listed RAM Investment Group Plc ("RAM").  In addition, the Company also announces that New Planet Investments Ltd, the special purpose vehicle established originally to acquire TrainTV from VMG as previously announced, has now been acquired by RAM.

The new Heads of Terms provide for an initial investment of £920,000 by RAM in return for an issue of new shares in TrainTV, giving RAM 49.9% of the equity of TrainTV. This investment includes the settlement, by way of the transfer of 200,000 shares in TrainTV, of a £200,000 loan made to VMG by RAM and the issue of a further 720,000 shares for cash payments of £400,000 and £320,000.

VMG will also grant RAM an option to acquire, by 31 August 2009, the remaining 50.01% of TrainTV which RAM does not already own at a price of £1,270,000, consisting of cash of £785,000, RAM shares with a value of £425,000 and up to £60,000 of loan notes to be issued by RAM, with all cash elements being used to pay down part of VMG's existing debt facility with Trafalgar Capital Partners LLP.  This option is subject to the approval of VMG's shareholders.

These transactions taken together provide VMG with an overall enterprise value of circa £2.19 million for the TrainTV business.  For the year ended 31 December 2007 Train TV made a loss of £0.56 million on turnover of £0.03 million. As at 31 December 2007 it had net liabilities of £1.7 million. For the year ended 31 December 2008 the draft results show that TrainFX made a loss of £0.5 million on turnover of £0.02 million and that as at December 2008 it had net liabilities of £2.2 million.

Tim Baldwin, Chairman of RAM commented: "We are delighted to announce the investment of £920,000 in TrainTV from VMG and look forward to the future opportunities presented should we exercise our call option to acquire control of the business. We are confident that we can provide the necessary growth platform for a business with the potential of TrainTV."

The recent absence of finance has delayed VMG's previous strategy. Due to these funding issues, the Company has been further inhibited in the forecasted rollout of screens to UK malls.  However, with these new funds VMG will be looking to deploy new screens and keep to the original UK installation plan.

Mike Cottman, Executive Chairman of VMG, said: "We are pleased to agree terms for the refinancing of TrainTV. The funds generated from the initial investment will support the Group and its ongoing liquidity issues. The extreme financial circumstances that have affected VMG in recent months continue and the deal with RAM is an important source of finance in the absence of traditional funding methods."

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