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Content Announces Share Capital Restructuring And De-listing

Global entertainment company Content Media Corporation (“Content”) has announced that it was proposing a share capital restructuring together with a de-listing from the London AIM stock exchange which will take the company private.
The Company has two classes of shareholders, Ordinary Shareholders and Preference Shareholders. The Preference Shareholders currently rank ahead of the Ordinary shareholders in certain respects and they also have a redemption payment due to them of approximately £9.8 million which is payable as and when the Company is able to.
Under the proposed transactions, the Preference Shareholders will agree to forgo their preferred rights and the £9.8m redemption liability in return for receiving 50% of the newly constructed Ordinary Share capital. This will remove the £9.8 million liability from the Company’s balance sheet. The existing Ordinary Shareholders will own the other 50% of the newly structured Ordinary Share capital and will no longer rank behind any other shareholders or have the redemption liability rank ahead of them.
Further, the Company proposes to delist from the London AIM stock market and re-register as a private company, the Directors having concluded that the costs and obligations of the AIM listing outweigh the benefits. In return, the Company will offer its small shareholders an opportunity to exit their shareholding - should they so wish - via a nil cost dealing facility and will also provide an ongoing matched bargain arrangement through its share registrar that will allow shareholders to trade their shares by private treaty going forward.
What will arise from these transactions is a private unlisted company with a single class of shareholders and an improved balance sheet, following the removal of the £9.8 million preference share liability. The Directors believe this will place the Company in a far better position to undertake further transactions that will grow the Company.
Following today’s stock exchange announcement, a circular has been sent to shareholders and details of all the proposals are contained within it. The proposals are subject to shareholder approval at a shareholder’s meeting to be held on 5 July 2012. Significant shareholder approval has already been obtained via irrevocable undertakings from the Company’s largest shareholders.
Huw Davies, Chairman of Content said: “For some time the Company and its shareholders have sought a solution to the Company’s share structure which we believe has proven an obstacle to the growth of the Company’s business and overall equity value. The Directors are pleased to announce this solution which we believe is good news for shareholders and for the Company as a whole.”
John Schmidt, CEO of Content said: "We believe these transactions will provide the Company with a far better opportunity to grow the Company’s business and we look forward to the prospect of executing on any growth opportunities that arise in the future."
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