TIDMMTMY
RNS Number : 2971J
Matomy Media Group Ltd
03 December 2018
Key Features for a Proposed Plan
Matomy Media Group Ltd. (LSE:MTMY, TASE:MTMY.TA) announces the
outline of its proposed plan for a comprehensive agreement with
Matomy's bondholders and with Rainmaker Investments GmbH
("Rainmaker"), the minority shareholder in Team Internet AG ("Team
Internet"), (the "Plan").
The trustee for the bondholders informed Matomy that a meeting
of the bondholders will take place by proxy on Wednesday, 5
December, in which two alternatives proposals will be considered
which involve a possible declaration of an event of default under
the terms of the bond and an immediate repayment of all amounts
under the bonds. Matomy informed the trustee that a declaration of
default is expected to harm the interests of the bondholders and
that in lieu of such resolution Matomy is proposing to enter
immediately into a discussion that will involve a comprehensive
agreement with the bondholders and Rainmaker that Matomy believes
will allow to preserve the value of Matomy and facilitate a full
payment to the bondholders and an agreement with Rainmaker.
Moreover, Matomy stated that no event of default has occurred and
that therefore there is no basis to declare such event. The Board
of Matomy believes that a disclosure of the Plan will allow a
proper and transparent discussion.
It is important to note that the value of Matomy's assets
exceeds the value of its liabilities (on a Net Asset Value, NAV,
basis)), and that Matomy strives to implement an arrangement that
is designed to avoid the risk that a temporary cash flow shortage
will defeat the legitimate interests of creditors. Declaration of
an event of default at this time is contrary to the interests of
the bondholders because it may increase the risk that such
declaration will harm the value of Matomy's assets, and as such,
will harm the ability of bondholders to secure full repayment. A
declaration of an event of default may adversely affect any
discussions with Rainmaker concerning the terms of purchase of the
remaining 10% stake in Team Interment and may prompt Rainmaker to
pursue its various contractual remedies. To the extent Rainmaker is
successful in doing so, the value for bondholders may decrease
dramatically.
Therefore, instead of the proposals submitted to the
bondholders, Matomy proposes to pursue a plan that involves the
following key features:
-- A fund raising by Matomy of up to $10M with a participation
commitment of key shareholders holding in the aggregate
approximately 55% of the voting share capital of Matomy;
-- Discussions with Rainmaker regarding the terms of such
purchase for the remaining 10% stake in Team Internet, with the aim
of an agreement that a reduction and/or change in payment terms is
required;
-- Adjusting the payment schedule of the principal amount of the
bonds, by advancing a partial repayment in 2019, together with
extending the overall payment period until the end of 2022, so that
the impact on the overall duration of the bond is minimal, and no
reduction (haircut) in the overall amount;
-- Adjusting certain bond covenants to reflect Matomy's actual current business structure;
-- Matomy is willing to consider a certain increase in interest in relation to such adjustments;
-- Granting the bondholders additional security tied to tangible financial assets of Matomy.
The Plan is subject to obtaining all corporate approvals and
reaching agreement with the bondholders and with Rainmaker. The
Plan is provided, inter alia, based on the following:
-- Despite various statements, currently no event has occurred
that constitutes an event of default under Matomy's bonds;
-- Management and Board believe that an immediate repayment of
the bonds will significantly reduce the bondholders' ability to
secure a full repayment of the bonds.
-- The value of Matomy's assets is higher than its total
liabilities (NAV). Matomy intends to obtain an independent
qualified financial opinion in support of its true financial
condition;
-- In order to secure Matomy's long term financial
sustainability, an effort should be made to reach an amicable
agreement on the terms of the purchase by Matomy of the remaining
10% stake in Team Internet in order to reach 100% ownership, which
should, in turn support the ability to repay the bonds. Any action
that defeats the ability to acquire 100% ownership will diminish
portions of the future ability to support such payments;
-- The proposals submitted by the bondholders include a notion
that cash injected by shareholders will be used for repayment of
the bonds, while in practicality, unrelated third party rights need
to be taken into consideration and agreed.
Furthermore, Matomy's complex holdings structure in Team
Internet, through its German and UK subsidiaries, which are direct
parties to the agreement with Rainmaker, create a potentially
unequal creditor relationship between the various stakeholders with
respect to such foreign entities. Therefore any unilateral action
has an associated high risk of damaging the interests of the
bondholders and as such requires an extra cautious and prudent
approach.
Matomy believes that its Plan, if approved by all parties, is
significantly more advantageous to the bondholders than the
proposed declaration of default. It provides higher likelihood of
payment of all amounts under the bond. In addition, it includes a
funding by shareholders that would not be achieved in the event of
declaration of default. As such, the shareholder financing would
also put Matomy in a better position to make payments to Rainmaker
and acquire a 100% interest in Team Internet.
The details above should not be viewed as a comprehensive
description of the full Plan. The above outline is not intended to
be sufficiently descriptive to capture all important terms and
characteristics, different risks and terms related to the Plan.
There can be no assurance with respect to the outcome of the actual
foregoing discussions or with respect to the actual implementation
of the Plan.
The information contained within this announcement may be deemed
by Matomy to constitute inside information as stipulated under the
Market Abuse Regulations (EU) No. 596/2014 ("MAR").
About Matomy
Matomy Media Group Ltd. (LSE: MTMY, TASE: MTMY.TA) is a global
media company. Founded in 2007 with headquarters in Tel-Aviv and
seven offices around the world, Matomy is dual-listed on the and
Tel Aviv Stock Exchanges.
For more information:
Matomy Media Group
Pamela Becker, VP Global Marketing
pamela.b@matomy.com
+972-74-7161971
Press Contact Information:
Noam Yellin, Noam@smartteam.co.il, +972544246720
Website: http://investors.matomy.com
LinkedIn: www.linkedin.com/Company/matomy-media-group
Twitter: @MatomyGroup
Facebook: www.facebook.com/MatomyMediaGroup
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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