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SABIDO TO AMPLIFY E-TV STAKE

Johannesburg – Sabido Investments, the controlling shareholder of Midi Television, was on the verge of buying US-based Warner Brothers’ 12 percent stake in Midi, the holding company of free-to-air station e-tv, Sabido said yesterday. Marcel Golding, acting chief executive of e-tv, confirmed the move to acquire the stake but said there was no agreement signed yet. Sabido was created in 1999 to accommodate changes in the shareholding of Midi after the original black empowerment minority shareholders were unable to fund their investments in the company. Sabido is controlled by Hosken Consolidated Investments (HCI), of which Golding is the chairman. Warner Brothers first announced its intention to sell its stake in Midi in June this year, claiming it was shifting its focus to majority holdings in strategic assets following its merger with America Online. Warner blamed local regulations that limited foreign ownership in local broadcasting assets to 20 percent, saying it could not pursue its growth strategy. But Warner’s initial 20 percent shareholding was diluted to 12 percent when HCI had to inject more equity accounted capital into the station. The 12 percent stake has been roughly valued at between R120 million and R180 million. Sabido and Warner have alerted the Independent Communications Authority of South Africa to the imminent changes in shareholding, which could result in an application for the amendment of Midi’s broadcasting licence to factor in these changes. The move by Sabido to acquire the Warner stake came amid talk that Rembrandt Group’s technology company, Venfin, was a possible buyer. Venfin helped to pull e-tv out of its financial woes last year, when it extended an indirect loan of R281,8 million to Sabido. Venfin said on releasing its interim results last week for the period to September that it had extended an additional loan of R38 million to HCI for e-tv. “If these loans had been converted into equity in Sabido, the holding company of e-tv, Venfin’s indirect interest in e-tv would have been 26 percent,” the company said. Venfin and HCI are co-shareholders in cellphone operator Vodacom. Venfin holds 5 percent and HCI holds 13,5 percent. Venfin’s share of e-tv losses in the six-month period was R23,8 million, down from R41,6 million in the previous comparable period. Kanthan Pillay, the spokesperson for e-tv, said the station had turned cash-flow positive last month, a year ahead of projections. Recent research showed the station had increased its viewership ratings by 42 percent to more than 7,2 million viewers, ahead of its nearest competitor, SABC’s Channel 3, by more than 1,2 million viewers.

Source: Business Report – Nathi Sukazi