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E-TV FEELS THE HEAT AS WARNER OFFERS MIDI STAKE FOR SALE

Johannesburg – Warner Brothers International Television said yesterday it was selling its 12 percent stake in Midi Television, the holding company of free-to-air television station e-tv. The news compounds the blow e-tv will face because the Mineworkers’ Investment Company (MIC), the investment arm of the National Union of Mineworkers, is also considering exiting Hosken Consolidated Investment (HCI), the controlling shareholder of Midi. Paul Nkuna, the chairman of MIC, which owns 21 percent of HCI, said the relationship between MIC and HCI management, specifically between chairman Marcel Golding and chief executive John Copelyn, had “broken down irretrievably”. HCI controls Sabido Investments, which owns 88 percent of Midi and was created to accommodate changes in the shareholding after black empowerment minorities failed to fund their equity. Warner has appointed Brait as adviser on the disposal. It claimed the decision to sell its interests in Midi was based on the company’s new focus, which had shifted towards majority holdings in strategic assets after the merger with America Online last year. Warner blamed local regulatory limitations on foreign ownership in broadcasting, which is pegged at 20 percent, for not giving it the option to pursue its strategy. “In addition, we believe that our value as a minority partner has diminished as Midi has fully developed its capabilities as a broadcaster,” the company said. Copelyn, also e-tv’s chairman, said the intended withdrawal by Warner would not have an effect on the capital structure of the business. Warner’s initial 20 percent stake was diluted to 12 percent when HCI had to inject more equity-accounted capital into the station. Warner products account for a third of e-tv’s total 3 000 hours of foreign content each year.

Source: Business Report – Nathi Sukazi