Update on TrainFX Disposal and Debt Funding

 

TIDMVMG 
 
RNS Number : 9327O 
Vision Media Group (Intl) PLC 
17 March 2009 
 

 
 
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| Press Release                      |                      17 March 2009 | 
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Vision Media Group (International) plc 
 
 
("VMG" or "the Company") 
 
 
Update on TrainFX disposal and debt funding 
 
 
Vision Media Group (International) plc (AIM:VMG), the outdoor media contractor, 
announces that it is in advanced negotiations for the sale of its TrainFX 
("TrainTV") business to New Planet Investments Ltd. ("NPI"), the special purpose 
vehicle established to acquire TrainTV from VMG. 
 
 
The new Heads of Terms, signed on 13 March 2009, provides NPI with an option to 
acquire 100 per cent. (previously 75 per cent.) of the TrainTV business at an 
overall enterprise value of between GBP2.1 million and GBP2.6 million.  NPI will 
be supported in this transaction by AIM-listed RAM Investment Group Plc ("RAM") 
who will have an option to acquire NPI at the same time that NPI acquires 
TrainTV. 
 
 
The terms of the agreement for this transaction will be satisfied by NPI paying 
VMG the sum of GBP100,000 per month for a total of 15 months, commencing on 27 
March 2009.  In addition, should RAM take up the option to acquire NPI, RAM will 
pay VMG GBP150,000 in cash on completion and will issue GBP300,000 of RAM shares 
(5,454,545 shares) to VMG at 5.5 pence.  RAM will also issue two Loan Notes to 
VMG, one for GBP300,000 redeemable on the third anniversary of the closing of 
this transaction and one for GBP150,000 redeemable on the sixth anniversary. 
 
 
In view of the timing of the closure of the transaction in these unprecedentedly 
difficult economic times, NPI has provided VMG with a non-refundable GBP300,000 
over the past three months by way of contributions to the working capital of the 
TrainTV business.  RAM has also provided a GBP200,000 loan facility ("the Loan") 
to VMG.  The first two tranches of the Loan were made available to VMG on 24 
February 2009 (GBP70,000) and 9 March 2009 (GBP80,000) respectively.  The Loan 
will carry a 12 per cent. interest charge, redeemable in 12 months time in the 
event that the transaction does not complete for any reason.  In the event that 
the sale proceeds as contemplated then the Loan will be extinguished and any 
amount of interest due on the Loan will be waived by RAM.If for any reason NPI 
is unable to complete this transaction, then the GBP500,000 invested into VMG by 
NPI and RAM to date will be converted into shares in TrainTV pro rata to the 
current GBP2,100,000 base valuation (23.8 per cent. of the equity). It is 
envisaged that this transaction will complete in second quarter of 2009.For the 
year ended 31 December 2007 Train TV made a loss of GBP561,612 on Turnover of 
GBP34,169. As at 31 December 2007 it had Net Liabilities of GBP1,630,646. 
 
 
Mike Cottman is the only director of VMG with a holding in NPI and, as Executive 
Chairman of VMG, the disposal is also a related party transaction under the AIM 
Rules. The Directors (other than Mike Cottman), having consulted with Seymour 
Pierce Limited, consider the disposal to be fair and reasonable insofar as 
shareholders are concerned and in the best interests of the Group and its 
shareholders as a whole.The Disposal of TrainFX will be conditional on the 
consent of shareholders at a general meeting. 
 
 
Dominic Brookman, Chief Executive Officer of VMG, said: "We are delighted to be 
in a position to finally bring this deal to completion. The combination of NPI, 
supported by RAM, is a good solid platform for our TrainTV business to be able 
to grow and flourish and receive the total focus, both financially and 
operationally, that it deserves so that it can deliver its full potential." 
 
 
In view of the extreme length of time involved in reaching the position where 
the TrainTV sale could be completed, during the past few weeks VMG has raised 
additional funding via existing family and friends, executive management and new 
investors injecting loans to the value of GBP225,000 into the Company.  These 
loans carry a 100 per cent. premium and are scheduled to be repaid on 30 June 
2009. 
 
 
In addition to this, in order to ensure that the Company has remained properly 
financed at all times, Executive Chairman, Mike Cottman, has increased his 
existing loan account with the Company by injecting a number of new loans to a 
total value of GBP542,477 over the past few months and the Board has approved a 
variety of premia to facilitate these loans, all of which reflect the urgent 
nature of these funding requirements.  Mr. Cottman's loan account, including all 
capital sums invested, assorted premia and accumulated interest, now stands at a 
total of GBP1,850,000 and reflects the Company's failure to repay loans as 
previously agreed.  Repayment of these loans will start in 2009 at such time as 
the Company can afford to commence repayments. 
 
 
Eric Anstee, Non-Executive Director, said: "In view of the extreme financial 
circumstances that we and many other companies have found ourselves in during 
these challenging financial markets it has not always been possible to find 
traditional financing methods at costs acceptable to the Company and 
shareholders at the critical times when finance has been required over recent 
months. 
 
 
"These challenges and the delay we experienced with installing the planned 
number of new digital panels in the important pre-Christmas period have 
resulted in a shortfall in our forecast income.  This, in turn, has meant that 
we have had to resort to Mr Cottman once again to provide us with more working 
capital and at commercial rates which reflect these extreme circumstances.  Mr. 
Cottman's loans and premia are subordinated to the Company's senior debt 
facility and will be repaid in the months and years to come as and when the 
Company's cash flow position is able to support any such payments.  We are most 
grateful for Mr. Cottman's continued support in this regard. 
 
 
"In addition to Mr. Cottman's support, a number of senior executives have had to 
provide personal guarantees to certain key lenders to the business and the Board 
has agreed to pay a commitment fee for these guarantees which has also been 
structured by way of a loan and associated premia on the loan and reflects the 
degree of risk that these individuals have put themselves in whilst the Company 
trades through these critical few months.  These commitments will be reviewed on 
a six monthly basis and any associated premium payments will only be made at 
such time as the Company's cash flow position and other debt commitments will 
permit." 
 
 
- Ends - 
 
 
For further information: 
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| Vision Media Group (International) plc  |                              | 
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| Dominic Brookman, CEO                   |    Tel: [phone] | 
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| [e-mail]        |  www.visionmediagroupplc.com | 
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| Seymour Pierce Limited                       |                         | 
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| Stuart Lane / John Depasquale, Corporate     |    Tel: [phone] | 
| Finance                                      |                    8000 | 
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| [e-mail]                 |   www.seymourpierce.com | 
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  Media enquiries: 
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| Abchurch                                     |                         | 
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| Henry Harrison-Topham / Jack Ballantyne      |    Tel: [phone] | 
|                                              |                    7714 | 
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| [e-mail]           |  www.abchurch-group.com | 
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This information is provided by RNS 
            The company news service from the London Stock Exchange 
   END 
 
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