LONDON – U.K. AIM listed sales, finance and production banner Content Media Corp., headed by John Schmidt,i s to de-list from the stock exchange and take the company private.
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The company told the market Thursday of its plans saying that the costs and obligations of being being listed the U.K.’s small cap market outweigh the benefits.
The company, which has a library of 200 plus feature films, more than 3,200 hours of television programming, 800 hours of TV movies and 300 hours of digital content, is also planning a major share capital restructure as part of the de-listing.
The share restructuring will mean the company can extinguish a redemption payment due on its books of £9.8 million ($15.2 million) currently due to preference shareholders “as and when the Company is able to” pay out.
Content, which has offices in London and Los Angeles, has two classes of shareholders — Ordinary shareholders and Preference shareholders.
The Preference shareholders currently rank ahead of the Ordinary shareholders “in certain respects” and it is those shareholders who have a redemption payment due to them.
The directors told the market through the de-listing and share-restructure, the Preference shareholders will agree to forgo their preferred rights and the $15.2 million redemption liability “in return for receiving 50 percent of the newly constructed ordinary share capital.”
The proposed move would remove the multi-million dollar liability from the company’s balance sheet and the directors said “significant shareholder approval has already been obtained via irrevocable undertakings from the Company’s largest shareholders,” for the plans.
The existing Ordinary shareholders will own the other 50 percent of the newly structured Ordinary Share capital and will no longer rank behind any other shareholders or have the redemption liability rank ahead of them.
In return for de-listing, Content will offer its small shareholders an opportunity to exit their shareholding – should they so wish – via a nil cost dealing facility.
The new-look privatized banner will also allow shareholders to trade their shares by private treaty going forward.
Overall, the plan is for a freshly-created private unlisted company with a single class of shareholders which the current manangement believes will place it “in a far better position to undertake further transactions that will grow the Company.”
The proposals are subject to shareholder approval at a shareholder’s meeting to be held on July 5. 2012.
Content chairman Huw Davies said: “For some time the Company and its shareholders have sought a solution to the Company’s share structure which we believe has proven an obstacle to the growth of the Company’s business and overall equity value. The Directors are pleased to announce this solution which we believe is good news for shareholders and for the Company as a whole.”
Schmidt, CEO of Content said: “We believe these transactions will provide the Company with a far better opportunity to grow the Company’s business and we look forward to the prospect of executing on any growth opportunities that arise in the future.”
Shares fell 35.7 percent in early trading for the company which posted a turnover of £20.7 million ($32.2 million) turnover in the year ending March 31, 2011 and a pre-tax profit of £1.15 million ($1.8 million) in the same year.