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MIDI APPLIES TO THE IBA FOR NEW SHAREHOLDING STRUCTURE

Johannesburg – Midi TV, the owner of free to air television station e.tv, would use its proposed new shareholding structure to lure strategic equity partners “with a R300 million capacity”, Marcel Golding, the acting chief executive, said yesterday.
Midi is applying to the Independent Broadcasting Authority (IBA) for the amendment of certain licence conditions, primarily the shareholding structure.
It proposes to consolidate South African shareholders` interests into a new company, Sabido Investments, that will be 100 percent owned by Hosken Consolidated Investments (HCI), the biggest shareholder in Midi with a 26 percent stake.
Sabido would then hold 80 percent of the station, while Warner Brothers, the US media group, would retain its 20 percent.
Malcolm Wallis, a senior counsel for Midi, said at the hearings that all local groups had agreed to transfer their interests into the new structure.
He urged the IBA to consider the application in the context of “keeping the boat afloat (rather) than allowing it to sink”.
The eight minority shareholders, including African Pioneers, RM Productions, Mopani Media and Medumo, failed to honour their collective financial obligations of close to R100 million as of last month.
As a result, HCI had to contribute R335,7 million, almost four times its projected contribution of R86,5 million, while Warner doubled its initial R67,5 million to R144,2 million. Vula Communications, the second biggest local shareholder with 25 percent, only made its initial R60,1 million contribution.
Golding said the group had in its first year spent about R450 million in capital expenditure, which had grown “much higher than the anticipated” initial cost of R334 million.
The group had thus spent more than R540 million on expenditure and programming to keep the station running, which translates to an overspend of R206,5 million.
Golding said he believed the IBA would approve Midi`s application because it intended to build the industry. “Also, because this is a black empowerment company and we need success stories.”
Mandla Langa, the IBA chairman, said the hearings were an “essential exercise that would throw some light into substantive issues” in an attempt to restore confidence in broadcasting.

Source: Business Report – Nathi Sukazi