| Wed 14 Aug 2002, 0:00 | | Kersaf/primedia - Announcement |
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Kersaf/Primedia - Announcement
Kersaf Investments Limited
(Incorporated in the Republic of South Africa)
(Registration Number 1967/007528/06)
Share code: KER ISIN: ZAE 000003844
("Kersaf")
Primedia Limited
(Incorporated in the Republic of South Africa)
(Registration Number 1993/003355/06)
Ordinary share code: PMA ISIN: ZAE000035119
N-ordinary share code: PMN ISIN: ZAE000035127
("Primedia")
Completion of the disposal of Ster Century Europe`s cinema interests in
Poland and Greece
Introduction
Further to the joint cautionary announcement dated 9 July 2002, ING
Investment Banking is authorised to announce that Ster Century Europe
Limited ("Ster Century Europe") has completed the disposal of its cinema
interests in Poland and Greece ("the Disposals").
The Polish disposal
Ster Century Europe`s operations in Poland comprised three multiplex
cinemas in Warsaw (Janki 10 screens, Galleria Mokotow 14 screens and
Promenada 13 screens) and one in Wroclaw (Korona 9 screens). Ster
Century Europe has sold the companies which comprised its Polish cinema
interests to IT International Cinemas B.V. ("ITI") for a total
consideration of US$19.6 million before a working capital adjustment
which is not anticipated to be material. In addition, ITI has assumed
US$5.1 million of bank guarantees which were previously guaranteed by
Ster Century Europe.
For the year ended 30 June 2002, Ster Century Europe`s cinema
interests in Poland reflected a negative EBITDA of US$0.3 million and
operating losses before interest and taxation of US$2.8 million.
As a consequence of the provisions for the impairment of assets
created in the past, no material profit or loss on disposal is
anticipated.
The Greek disposal
Ster Century Europe`s operations in Greece comprised one 11-screen
multiplex in Thessaloniki and a 10-screen multiplex under construction
in Athens. Ster Century Europe has sold the ultimate holding company
for its Greek cinema interests to Drematco Limited for a total
consideration of _10.75 million. In addition, Drematco Limited has
assumed from Ster Century Europe:
* US$3.1 million of bank guarantees in respect of the Thessaloniki and
Athens sites; and
* approximately US$2.2 million of capital expenditure commitments in
respect of the multiplex currently under construction in Athens.
For the year ended 30 June 2002, Ster Century Europe`s cinema interests
in Greece generated EBITDA of US$1.2 million and operating profits
before interest and taxation of US$0.8 million.
A profit on disposal of Ster Century Europe`s cinema assets in Greece
will be approximately US$5.1 million.
Use of proceeds
Following the refinancing of Ster Century Europe in October 2001, the
shareholders of Ster Century Europe subscribed for US$50m of Notes,
which were drawn in Euros at the then prevailing exchange rate, in the
following amounts:
"A" Notes "B"/ "C" Notes
subscribed subscribed
(Euro m) (Euro m) Shareholding
Royale Resorts Holdings
Limited ("Royale Resorts") 16.30 5.43 46.9%
Primedia 5.43 5.43 40.6%
ING Bank N.V. 21.74 12.5%
Total 43.47 10.86 100.0%
The "A", "B" and "C" Notes rank pari passu in all respects other than
for redemption, where the "A" Notes rank in preference to the "B" and
"C" Notes.
As part of the October 2001 refinancing, Royale Resorts, a 73.3% held
subsidiary of Kersaf, and Primedia provided joint and several guarantees
in respect of a US$30 million bank facility with Standard Bank. In
addition, Royale Resorts provided US$10 million of standby financing for
Ster Century Europe that has been called and consequently Royale Resorts
has subscribed for US$10 million in "C" Notes. As a consequence of
certain put and call arrangements in place between Royale Resorts and
Primedia, the holdings in the Notes and the equity of Ster Century
Europe have been adjusted as reflected in the table below. There remains
a further US$10 million of standby financing which is available to Ster
Century Europe in certain circumstances until October 2003 and which is
jointly underwritten by Royale Resorts and Primedia. Based on current
projections for the business, Ster Century Europe will not be entitled
to call on this funding.
The net proceeds from the Disposals, together with the net proceeds
from the sale of the cinema interests in Hungary and the Czech Republic
for US$15.8 million which was completed on 18 June 2002, have raised
approximately US$45 million for Ster Century Europe.
Ster Century Europe has applied the net proceeds from the Disposals to
repaying and cancelling its remaining bank facility with Standard Bank.
Consequently Royale Resorts and Primedia have been released from their
US$30 million guarantee obligation. In addition, Ster Century Europe
has repaid 20.25 million Euro of the outstanding 64.34 million Euro
Notes, following which Ster Century Europe retains cash balances of
approximately US$9 million. Accordingly, the outstanding funding of Ster
Century Europe and the interests of the shareholders in Ster Century
Europe, are as follows:
Outstanding Notes in favour
of the Shareholders (Euro m)
"A" Notes "B"/ "C" Notes Shareholding
Royale Resorts 11.616 10.43 50.0%
Primedia 10.43 37.5%
ING Bank N.V. 11.616 12.5%
Total 23.232 20.86 100.0%
Ster Century Europe`s remaining assets comprise:
* one multiplex in Slovakia with 8 screens, the US$1.8 million sale of
which has been agreed subject to the approval of the Slovakian
competition commission, clearance from which is not expected before
November 2002;
* two multiplexes in Spain with in aggregate 21 screens; and
* seven multiplexes in the UK and Ireland comprising in aggregate 87
screens, all of which are complete other than the multiplex in
Basingstoke, which will be opening in October 2002.
Sandton
13 August 2002
Financial adviser
ING Investment Bank
Sponsor to Primedia
Investec Bank Limited
(Registration number 1969/004763/06)
Sponsor to Kersaf
ING Investment Bank
Date: 14/08/2002 07:21:12 AM Produced by the JSE SENS Department
