10 Dec 2008 12:07
TAU CAPITAL PLC
10 December 2008
PRIVATE EQUITY INVESTMENT - DIGITAL TV
Tau Capital plc ("Tau") has completed a second tranche of private investment in its existing portfolio company, Digital TV LLP ("the Company" or "DTV"), in the amount of $10.9 million. DTV is an operator and provider of cable TV, internet and telecommunications services in Kazakhstan with over 50,000 subscribers and branches in Almaty, Astana and Aktau. Tau's prior investment in the Company in October 2007 amounted to $7.5 million and was in the form of direct equity and a shareholder loan structure.
DTV shareholders, Tau and funds managed by Compass Asset Management ("Compass Funds"), have jointly agreed to make an additional investment of $15 million in cash in DTV, of which $10.9 million is provided by Tau and $4.1 million by Compass Funds, through shareholder loans. The proceeds will be used for the following purposes:
DTV's buyback of 25% equity stake from minority shareholder Indira Shagirova for $7.2 million,
funding several pending regional acquisitions of other cable operators in Kazakhstan, and
funding specific working capital, capex and other corporate purposes.
Tau's cumulative investment in DTV of $18.5 million is structured through both direct equity investments (14.53% equity stake) and shareholder loans, the combination of which provides Tau with a larger economic interest than its equity capital ownership in the Company. On completion of this transaction, the pro-forma legal (i.e. voting and operational) ownership in DTV will be as follows:
Tau 14.53%
Compass offshore funds 4.57%
Compass Kazakh funds (onshore funds) 55.00%
Erjan Tungushbaev (founder of DTV) 25.00%
Director of Tau, Richard Horlick, commented on the transaction:
"DTV shareholders, including Tau, will support the further growth strategy of the Company and will explore strategic opportunities to further develop its business through partnerships, joint ventures and/or acquisitions. We believe that the cable, internet and telecom market in Kazakhstan presents attractive long-term growth fundamentals."
In the fiscal year to 31 December 2007, DTV generated revenues (according to unaudited management accounts) of approximately KZT300 million and a net loss of approximately KZT217 million. In addition, as at 31 March 2008 (according to unaudited management accounts), DTV had total assets of approximately KZT1.6 billion.
Further information, please contact:
| IOMA Fund & Investment Management Ltd Cynthia Edwards | Tel: +44 (0) 1624 681381 |
| Numis Securities Limited Nominated Adviser: Nick Westlake / Brent Nabbs Corporate Broking: Alex Ham | Tel: +44 (0) 20 7260 1000 |