RHM.L Regulatory News (RHM)

23 Sep 2009 07:00



23 September 2009

 RedHot Media International Limited

("RedHot" or the "Company")

Directorate Change

RedHot Media International Limited, the AIM-listed Asian-based media broking group, announces that Melissa Gilmour, Non-Executive Director of the Company, has resigned from the Board of the Company with effect from today, 23 September 2009. Melissa is resigning to concentrate on other business interests and the Board wishes to thank Melissa for her valuable contribution to the Company, particularly through the Company's flotation on AIM last year.

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Notes to Editors:

RedHot Media International Limited (AIM: RHM), is a Cayman Islands incorporated holding company. Its primary activity is that of media broking group, including an innovative barter sales trading activity, in Malaysia and the People's Republic of China ('PRC'), with the majority in Malaysia.

A media broker conventionally purchases advertising space on behalf of its clients and earns commissions from the media providers based on the amount of advertising purchased. The AxChange business model adopts a pull marketing approach by aggregating demand from advertisers and consumers/merchants to generate additional sales for both the media owners and advertisers respectively.

RedHot also acts, to a lesser extent, as a non-stockholding distributor for certain clients (for whom it also acts as a media broker) with the intention of generating higher margins for the Group than would be obtained in conventional media buying.

Using this distribution based business model (AxChange), which the Directors aim to grow, RedHot enters into a contract to draw down various lines of inventory and then, as the inventory is sold through RedHot's distribution network, the proceeds from the sales are used to purchase media space for the same client.

The AxChange business model has been designed to free up working capital; allowing RedHot's customers to pay for advertising and assist new entrants into Malaysia & China (where capital controls are still in place) in selling their products using RedHot's established distribution network. RedHot also believes the model provides benefits to its distributors; providing them with lower unit prices and access to credit facilities to which they otherwise would not have access.

The Company aims to extend this model to work in other Asian countries; initially China (with offices in Beijing, Shanghai, Guangzhou).