TopTV in 'business rescue', needs cash

2012-11-01 08:45
Thinus Ferreira
Cape Town - On Digital Media (ODM), who is currently running the TopTV pay-TV platform in South Africa, has gone into "business rescue" under the Companies Act, saying that the pay-TV company urgently needs cash - preferably from a South African industry player.

The TopTV board has been looking into the future and feels that the pay-tv platform might possibly have problems in meeting its current payment obligations due within the next six months.

TopTV, which started a major turnaround process with new interim CEO Eddie Mbalo earlier this year, says that the bottom-line of the struggling pay-TV business has improved, and that TopTV is "in the strongest position the company has been in since inception".

Yet the company is facing financial difficulty and now needs business rescue under section 129 of the new Companies Act to "provide a protective bubble around the company and buy it some time to complete the search for a strategic equity partner".

'A precautionary measure'

However, TopTV have taken to calling this "a precautionary measure". The company says that they will continue to "function as normal" but refers to operating its pay-TV business as "continuing our battle".

TopTV needs more money urgently and has struggled to find a business partner willing to make a large cash injection into South Africa's second pay-TV business which started its commercial operations in May 2010.

"The business has always required a significant cash injection to recapitalise it in order to complete the turnaround and take the business to the next level of competitiveness," said Mbalo in an unexpected statement released late on Wednesday.

"The board, management and staff at TopTV are committed to the company, and we are determined to work together as a team to make it a successful business," said Mbalo.

"Good progress not withstanding, and as part of the turnaround process and good corporate governance, the board of directors of On Digital Media, the holding company of pay-TV operator TopTV, regularly assesses whether the company is in a position to meet its current obligations and those due within the next six months."

Protective bubble to buy some time

"Based on this ongoing assessment and precipitated by the difficulty in finding an appropriate partner, the board has prudently opted to adopt the provisions of business rescue as per the new Companies Act.

"This will provide a protective bubble around the company and buy it some time to complete the search for a strategic equity partner. The company will continue to function as normal," said Mbalo.

Now TopTV is making a public plea for a business partner - hopefully a South African one - with deep pockets.

"The best source of such a cash injection would be a current industry player," the company said in the statement.

TopTV providing healthy competition

"Such a partner would also be in a position to assist with other required strategic resources that would take time for TopTV to accumulate.

"Due to the competitive landscape locally and the legislative requirements that allow a foreign entity only a 20% share in ownership, the process of finding an appropriate partner has proved challenging for the start-up business."

"It is still very much business as usual at TopTV," the company assured in their statement.

"While we are taking precautionary measures and being prudent with our current cash reserves, the board has taken this decision to ensure the long-term sustainability and growth of the company."

TopTV has been providing healthy competition for Multichoice's pay-TV platform DStv.

"We further believe that this decision will cement our commitment to transparent business practices while we continue our battle on what we hope will become a more transformed landscape and a level playing field," the company said in the statement.

Comments

  • roy.wadhams.1 - 2012-11-01 09:47

    TopTV will follow SABC, South Afican Airways,Trans Net, always looking for money because of their ineptitude to run a business/company. Once they have paid themselves huge salaries they run out of money then expect help.

      preshen.govender.12382 - 2012-11-01 12:36

      It is not too late to launch the porno channel

      charlesbronson.bronson - 2012-11-01 12:52

      I am wondering if they really have some customers. I do not know anyone having TopTV. Shame it must be lonely out there.

      gift.mushi.9 - 2012-11-01 13:08

      It took Mnet (DSTV)(MIH) 20 years to build its brand and have customer base, TOP TV wants to take 2.0 years. Wow what a short cut. Lets wait and see.

      andrez.kolesky - 2012-11-01 15:00

      You cant f@rt against thunder. They thought they were going to give DSTV a hard time, without sports channels nogal.

      mattewis.kat - 2012-11-06 22:35

      Given the recent growth of DSTV by nearly 500 000 subscribers proves that the market is not too small or too impoverished! I don't think DSTV is worth much in terms of value for money, but that's not what their viewers seem to think! TopTV is in dire need of a better premium product, offering not only similar technology to DSTV (like the HD-broadcasts & PVR capability they initially promised), but unique features compared to DSTV (like for eg. Dolby Digital- & DTS surround audio). Their channel content is not only rather dismal, but also stagnant! The new material they have offered since their launch, is nothing more than pitiful! ASTV, Tshwane TV & African Movies, are all rather pathetic! They need more mainstream movies, more documentaries, more children's channels, more decent music channels (I mean what happened to "Q"?), better material on their own "Top" channels with far less repetition, and at least one local sport channel! What they consider their flagship channel (ie TopOne), I don't even watch! I'm guessing if they implemented only a HD & PVR function within the first year as they originally promised, they would have exceeded the 500 000 mark over a year ago! Already companies are lining up to get into the pay/view internet TV scene. If this happens before TopTV can implement some/all of these growth measures, I predict curtains for them. Only the Telkom monopoly is still standing in the way of proper internet-based television! Truly hope they make it, though!

  • msophiasharp - 2012-11-01 10:00

    Top TV is not a kindergarten - secret is not only in producing offspring (which we must thank Mother Nature for) - how about proving to the world (if you can) that you are able to create something from nothing (which I doubt)

  • julian.booyens - 2012-11-01 10:08

    The greedy tycoons at multichoice are all now laughing in their boardrooms

  • SoBit.BeitSo - 2012-11-01 10:21

    if toptv improve its sport channel/s it would improve their subscriber base & win back their customers that has left them.

  • Gerald Jordaan - 2012-11-01 10:21

    Even with a ' new companies act protective bubble ' Top TV is gonna POP !! Welcome to the real world !!

  • jmokgotlhoa - 2012-11-01 10:27

    Without live sport channels, TopTV will not survive. They too, have to flight Rugby, Cricket and Soccer. I do not fully understand broadcasting rights, but somehow they must figure out a way, and fast too.

  • terrylee.heuer - 2012-11-01 10:41

    Shame that's bad no bonuses for you guys its best you start freezing increases as well!! Hope some kind SA company with loads of cash comes to your rescue!! Good luck

  • brett.susan - 2012-11-01 13:56

    No wonder I keep seeing the same movies played over three different channels AT THE SAME TIME!

  • bernadette.francois.75 - 2012-11-01 14:08

    "TopTV has been providing healthy competition for Multichoice's pay-TV platform DStv." Really??? They may be the ONLY competition but it definitely is not healthy competition.

  • nom.deplume.969 - 2012-11-01 15:26

    I dont know much about broadcast rights, but if ICASA and every other relevant Regulatory body controls this, then they should level the playing field and allow any accredited pay channel to acquire any rights that they choose? surely there are a myriad of broadcasters showing the live sports of choice for the "discerning" South African customer? Why can only one pay tv show live EPL football?

  • oopkop.denker - 2012-11-02 10:55

    Like seriously, who do these execs think they are deceiving? You just need to read through most of these comments to get a blueprint of what is required to at least give them a chance to compete against Multichoice. Add to this some additional expertise and clever marketing (may I emphasize this again, "CLEVER") and a SOUND business vision with a SOUND business PLAN and you'll stand a chance. So what expertise did they really bring to the party...or are they only drinking all the bubbly?

  • razzo.alfa - 2013-01-14 20:25

    Watch this space - the idiot CEO will get a multi million Rand performance 'bonus' just before they go bang - SA darkie style... Such a pity because DSTV deserves serious competition considering that all they do lately is repeat their entire content over and over and over and over again!

  • anthonylange - 2013-01-19 06:45

    Ive ALWAYS been of the opinion that YOU CANT SOLVE A MONEY PROBLEM WITH MONEY. So in case someone on the current board reads this. If you cant make it with 5 channels you aint gonna make it with 55 or 555. Porn wont cut it cause those are the customers you DO NOT WANT. If Top TV are realy serious about turning things around. do 2 basis things. Focus, Categorize and Brand. Tony

  • pages:
  • 1