Letter to the trustee of the bondholders

July 7, 2019

Re: Letter to the trustee regarding the upcoming bondholders meeting

Further to the previous announcements of Matomy Media Group Ltd. (LSE: MTMY, TASE: MTMY.TA) (the "Company") on June 27, 2019 (RNS 7303D) and July 2, 2019 (RNS 2347E)) regarding the convening of a bondholders meeting by the trustee of the bondholders (Series A) of the Company ("Trustee"), with a proposed resolution to approve a contingent demand for an immediate repayment of the bonds if an amount of US$ 4.5 million is not paid within 45 days, the Company hereby announces that on July 7, 2019 it sent, through its external counsel, a letter to the Trustee, in which it argued against such proposed resolution and emphasised the difficulties that such proposed resolution entailed.

The Company's letter stipulated that the Company and its officers have been working in the past few months to sell the Company's holdings in Team Internet AG ("TI"), as well as to reduce its G&A expenses, to collect debt from different debtors and to negotiate a restructuring plan between the Company and its stakeholders. The Company emphasised that these actions have been carried out for the benefit of all the stakeholders of the Company, and primarily for the benefit of the bondholders with an aim to facilitate an early repayment of the bonds.

The Company informed the Trustee that, in light of difficulties raised in the negotiations for the sale of its TI shares, the Company required more time in order to try and conclude such negotiations, and that as of this date the Company was unable to estimate the exact time period required for concluding the negotiations. The Company also stressed that it was of the opinion that a unilateral decision to demand an immediate repayment of the bonds may materially prejudice the chances to complete such sale, and in particular the chances of receiving a consideration that would suffice for the full repayment of the bonds. Furthermore, the Company noted that, in light of the uncertainty in reaching a transaction for the sale of TI shares and the implications for the Company's  continued operations and ability to repay its debts when due, such proposed early repayment to the bondholders at such time may expose the Company to claims of prohibited preference of creditors, and in this regard the Company referenced specifically the claims made by Rainmaker Investments GmbH with respect to an alleged debt of the Company to Rainmaker (the Company rejects such claims made by Rainmaker and is of the opinion that there is no debt owed to Rainmaker under the current circumstances, but as there is a dispute with respect to this matter, the Company must refrain from prepaying any amount under the bonds, as in any case of pending debt claims).

The Company informed the Trustee that it was of the opinion that if the bondholders nevertheless insist on their demand for an immediate early repayment of the bonds (and without going into the question of the amount that may be available for any such repayment), such repayment would have to be subject to an indemnification undertaking by the Trustee to repay the Company the full amounts paid to the bondholders in such early repayment and to indemnify the Company and its officers for any amount paid by them in connection with such early repayment. The Company clarified that a refusal by the Trustee to provide such an indemnification undertaking would not allow the Company to make any early repayment, in any amount.

In its letter, the Company also mentioned that demanding an immediate repayment would have implications not only on the negotiation for the sale of TI shares and its terms, but also in terms of ceasing trading in the Company's bonds, and it required the Trustee to inform the bondholders of such implications of the proposed resolution that they were asked to vote on.

About Matomy

Matomy Media Group Ltd. (LSE: MTMY, TASE: MTMY.TA) is a global media company. Founded in 2007 with headquarters in Tel-Aviv, Matomy is dual-listed on the London and Tel Aviv Stock Exchanges.

Press Contact Information: 

Noam Yellin, Noam@smartteam.co.il, +972544246720

Website: http://investors.matomy.com