RHM.L Regulatory News (RHM)

10 February 2012

RedHot Media International Limited

('RedHot' or the 'Company')

Amendment to terms of acquisition of IMM and

Issue of Deferred Consideration

The Board of RedHot announces that it has issued and allotted 701,327 new ordinary shares of US$0.10 each (the "New Ordinary Shares") at a price equivalent to 32p per share and paid RMB2,235,381.81 (the "Cash Consideration") in respect of the amended deferred consideration which is payable by the Company in relation to the acquisition of In Motion Media ("IMM"), the original details of which were announced by RedHot on 19 December 2008. 

In view of the positive impact of IMM's brand name and reputation amongst advertisers and media partners for RedHot's business in the PRC, IMM, Redhot Media (HK) Limited ("RHM (HK)") and Redhot Media International (Shanghai) Ltd ("RHM (Shanghai)") (together, "the Parties") have mutually agreed to renew the terms of the agreement with IMM for a period of one year, from 1 January 2012 to 31 December 2012. The agreement will be reviewed annually for extension for a further year and will only be extended subject to the consent of all parties. The Parties have agreed a variation on the payment consideration such that the vendor of IMM, being Mr Perry Tsang Wai Keung and/or his appointed nominees, following the publication of RHM (HK)'s and RHM (Shanghai)'s audited accounts for the year ended 31 December 2012, shall be entitled to receive:

(a) An amount equivalent to 100% of the total audited profit after tax of RHM (HK) and RHM (Shanghai) for the year to 31 December 2012; and

(b) Such number of RedHot ordinary shares of US$0.10 each ("Ordinary Shares") in value equivalent to 20% of the total audited profit after tax of RHM (HK) and RHM (Shanghai) for the year to 31 December 2012.

Further, the Parties have agreed to vary the terms of the purchase consideration for the 2010 and 2011 financial years such that a consideration equivalent to 100% of the audited profit after tax of RHM (HK) for each financial year will be payable in cash; whilst the balance of the consideration, equivalent to 20% of the audited profit after tax of RHM (HK) for each financial year 2010 and 2011, shall be payable in new Ordinary Shares. The original terms of the agreement required payment each year of 80% of the audited profit in cash and 40% of the audited profit in new Ordinary Shares.

The New Ordinary Shares represent 20% of RHM (HK)'s profits for 2010 and the Cash Consideration represents 20% of RHM (HK)'s profits for 2010. RMB8,941,527 has already been paid to the vendors of IMM in respect of the original 80% cash element of the payment consideration for 2010.

Application has been made to the London Stock Exchange for the admission to trading on AIM of the New Ordinary Shares and it is expected that dealings in the New Ordinary Shares will commence on or around 13 February 2012.

In accordance with the Financial Services Authority's Disclosure and Transparency rules, RedHot hereby notifies that the Company's issued share capital following admission of the New Ordinary Shares will comprise 37,278,542 Ordinary Shares. All of these shares carry voting rights. The Company does not hold any shares in treasury. The above figure of ordinary shares in the Company carrying voting rights may be used by shareholders as the denominator for the calculations by which they will determine if they are required to notify their interest in or a change to their interest in the Company under the FSA's Disclosure and Transparency Rules.

Notes to Editors:

RedHot is a one-stop centre comprising media and advertising businesses and marketing and distribution channels in both Malaysia and China, creating a large network of clientele and business affiliates. RedHot operates in four defined market segments, namely Media, Advertising, Merchandising and Insurance Product & Financial Advisory. RedHot's ecosystem comprises of media brokerage (media owners including newspapers, television, radio, billboards, websites and social media), disposal channels (retail outlets, wholesaler, banks, insurance companies, agency networks, consumers and corporate clientele), content distribution (internet users and content users) and media infrastructure (reach to brand owners and advertisers, internet users for mobile and PC, and target market for consumers and end-user).