The transfer of assets in Johannesburg-based On Digital Media (ODM) – which traded as TopTV – to China-backed StarTimes Group is looking increasingly precarious. One major ODM shareholder, South Africa’s Industrial Development Corporation (IDC) has issued proceedings to recover a claimed ZAR 750 million in funding (about $76 million). The writ has been issued against certain of its fellow-shareholders in ODM.
Local reports say that the litigation is targeted at Kopano Ke Matla, the investment arm of trade union federation Cosatu, and First AOne Trade & Invest, along with First National Media Investment Holdings, which holds 27.87 per cent in ODM. First AOne Trade & Invest is a black economic empowerment holding company and owns 10 per cent of ODM. The IDC is seeking R293 million from First National Media, which had provided for this debt. The IDC also wanted R161.8 million from First AOne Trade & Invest and R297.3 million from Red Gold Investments over a first preference share subscription agreement and another agreement.
Mandla Mpangase, the spokesman for the IDC, said October 28th that the Government-backed investment company had not entered into settlement negotiations with the shareholders. “IDC has been approached by some shareholders in ODM. However, none of the proposals presented were acceptable to the IDC.”
The rescue plan for ODM was outlined more than a year ago and saw StarTimes Group take a 65 per cent economic interest in return for a 20 per cent stake in the broadcaster. Mpangase said the IDC had “no reason to believe Star Times will not be able to meet its obligations in terms of the business rescue plan”. “If the business rescue plan was to fail, the business rescue practitioner can exercise one of the two options: to look to an alternative investor or recommend the liquidation of ODM,” he added.
The business rescue adviser who is supervising ODM’s exit from the local version of Chapter 11 protection is holding a meeting on October 31st to update all stakeholders and the press on the latest situation.