SA's ailing pay-TV operator, TopTV, appears to be a highly sought-after venture, as bidders clamber for a stake in the company, which has been undergoing a formal business rescue process since last year.
Although the rescue plan proposed by Chinese firm StarTimes was unanimously okayed and finally adopted by creditors and shareholders of TopTV, at a scheduled business rescue meeting this week, one of two last-minute bidders, Dynamic TV, is set to challenge the decision.
On Tuesday, the rescue plan posed by StarTimes in April was adopted by a majority of 93.9% of TopTV parent company On Digital Media's (ODM's) creditors, while 100% of the company's preference shareholders and 99.3% of its ordinary shareholders gave the motion the thumbs up.
TopTV's preference shareholders include the Development Bank of Southern Africa, the Industrial Development Corporation, the National Empowerment Fund and global satellite operator SES.
Unsolicited interest
According to TopTV's business rescue practitioner, Peter van den Steen, he received two "unsolicited expressions of interest" during Monday and Tuesday.
The first late offer to reach Van den Steen's table was a consortium, Dynamic TV, led by businessmen Given Mkhari, of MSG Afrika Media, and Malose Kekana, of Falk Trading. The group had secured funding from ODM rival Naspers-owned MultiChoice, to the tune of half a billion rand.
It later emerged that another company with broadcasting roots in Africa, Kenyan pay-TV operator Wananchi Group, had also submitted an offer. According to TopTV CFO Simon Woodland, Wananchi Group was one of the parties that submitted an expression of interest at the time these were called for at the end of last year. "However, at that time they had not confirmed their funding so their offer was not as strong as that of StarTimes."
Established in 2008, Wananchi positions itself as "East Africa's leading home entertainment operator". The company offers broadband, pay-TV and voice over Internet Protocol services in East Africa.
Wananchi's satellite pay-TV offering, Zuku TV, offers 60 channels in Kenya and Uganda. The company says it will be "rolling out aggressively" to Tanzania, Ethiopia, Eritrea, South Sudan, Rwanda, Burundi, Malawi and Zambia in the coming months.
Foreign ownership challenge
While the outcome of Tuesday's shareholders meeting suggests the StarTimes deal is done and dusted, Dynamic TV is not about to sit back and allow the foreign firm - which it has accused of "fronting" by portraying a "mirage" of BEE compliance - take TopTV without challenge, or at least inquiry.
In a statement yesterday, Dynamic TV said it had noted the outcome of the business rescue process and that it would scrutinise the process, before taking further steps. "The creditors and shareholders have made their decision and we are studying the process, outcomes and related implications of the decisions and will pronounce on the next steps in due course."
Van den Steen says Dynamic TV and Wananchi's late expressions of interest were presented to creditors and shareholders during the meeting, after which attendees were invited to discuss the business rescue plan.
The meeting saw a two-hour delay as the two last-minute bids were discussed, but at the end of the day creditors and shareholders - under pressure to reach a conclusion in light of the protracted uncertainty around TopTV - opted for StarTimes.
The decision means the Chinese firm will purchase a 20% stake in TopTV, as permitted by the Electronic Communications Act regarding foreign interest in local broadcasting entities.
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