Major Investment by Canaan
August 21 2007 - 3:01AM
UK Regulatory
RNS Number:5288C
Cellcast plc
21 August 2007
Cellcast plc
("Cellcast" or "the Company")
Cellcast and Canaan Partners to form
new Asian digital media venture
Highlights:
*Cellcast Asia Holdings ("Cellcast Asia") established as a new vehicle for
pan Asian regional distribution of its interactive products and services.
*Cellcast plc to inject 100% of its shares in Cellcast India and its 50%
holding in its SE Asian based JV with Malaysian listed mTouche into Cellcast
Asia
*US$5.25 million raised from new investor Canaan Partners to fund rapid
regional expansion and strengthen Cellcast's and Cellcast Asia's balance
sheets
*Significantly reduces Cellcast's operating costs moving forward
*Canaan brings extensive global experience in the IT and media sector to
support the existing strength of Cellcast Asia's management team
*Cellcast will retain 37.5% investment in Cellcast Asia - a holding now
valued at US$5.1m.
Cellcast plc (AIM: CLTV), the global interactive digital broadcaster, announced
today the establishment of Cellcast Asia Holdings ("Cellcast Asia") to meet the
strong demand for interactive digital entertainment in the Asia and South-East
Asia regions.
Cellcast is injecting its 100% holding in Cellcast Interactive India Pvt Limited
("Cellcast India") and its 50% holding in Cellcast SEA Limited ("Cellcast SE
Asia") into the new venture. At the same time, Cellcast has conditionally agreed
to issue US$5.25m of Series A Preferred Stock (the "Preferred Stock") to Canaan
Partners ("Canaan"), a global venture capital firm. The Preferred Stock issue
values the enlarged share capital of Cellcast Asia at US$13.5 million.
Cellcast will hold 37.5% of the fully diluted share capital of Cellcast Asia,
valuing this portion of the business at US$5.1 million (#2.6 million) compared
with an investment cost of US$1.4 million (#0.7 million). Canaan will hold
38.9%. The remaining shares are to be held by a trust which will administer
share option plans for existing and future employees of Cellcast India.
Andrew Wilson, CEO of Cellcast, said: "The investment by Canaan, a specialist
investor in the information technology sector, confirms the strength of our
commercial proposition. The opportunity in this region is of such a size that it
exceeds Cellcast's ability to realise it alone. The investment by Canaan
Partners is a strong endorsement of Cellcast's market-leading proprietary
technology and applications, and recognition of the proven skills and sector
experience of its established Asian-based management team. The establishment of
this dedicated regional operation and its independent funding through Canaan
Partners, is the most effective way for Cellcast plc to realise its growing
Asian ambitions whilst retaining resources for reinvestment in other
technological and geographical areas".
Cellcast Asia will be led by Pankaj Thakar, previously CEO of Cellcast India,
who brings to the venture over twenty years experience of building and managing
companies in the computer, telecom and wireless sectors. The company will be
headquartered in Mumbai, India, and will serve a market of over 2 billion
consumers in India, Sri Lanka, Pakistan, Bangladesh, Malaysia, Singapore,
Thailand, Indonesia, Vietnam, Laos, Cambodia and the Philippines.
The new company will build on the success of Cellcast India and Cellcast SE Asia
in developing significant demand for Cellcast's multi-platform interactive
formats and programmes. The region has some of the fastest growing mobile,
multi-channel television and online digital entertainment markets in the world,
particularly in India, which added 15.5 million mobile subscribers in the first
quarter of this year, taking the total to 165.1 million, and where the TV
industry is expected to grow at a compound annual rate of 22 per cent over the
next five years.
Pankaj Thakar, Cellcast Asia's new CEO, said: "The rapid growth in mobile
penetration in the region, together with the continuing expansion of the
multi-channel television industry, are creating major opportunities for
Cellcast's digital entertainment products. By combining the resources of
Cellcast India with the strong market position of our partner mTouche, we are
creating a powerful regional distribution capability with a combined network of
relationships with over 20 leading regional broadcasters and over 30 telecoms
operators. The exciting participation of Canaan Partners will enable us to
accelerate growth through investment in new formats and applications and the
expansion of our management team to support our regional initiatives."
Alok Mittal, Managing Director - India, Canaan Partners, said, "With mobile
phones fast becoming a general-purpose interaction device in the hands of nearly
two billion consumers worldwide, interactive digital entertainment is
increasingly becoming an intrinsic part of the mobile users across generations.
We are very upbeat about Cellcast's future which has emerged as one of the most
promising companies in this sector developing and distributing proprietary
applications and television programming in markets across the world. The company
constantly develops new formats for applications and interactive programming
suitable for emerging media platforms including 3G, IPTV, enhanced broadband,
mobile video and wireless broadband services. Cellcast is Canaan Partners' first
investment in the growing trend of value added services in India."
Cellcast Asia
Cellcast Asia Holdings is a holding company whose principal investments will be
its 100% holding in Cellcast India and its 50% holding in Cellcast SE Asia.
Cellcast India
Cellcast Interactive India Pvt Limited was established in November 2005 as a
wholly-owned subsidiary of Cellcast plc and its first TV series launched in
mid-2006 became a landmark in the Indian television industry. The company is a
pioneer in developing integrated participation content to address the
entertainment demands of India's 112 million TV households (62% of which are
pay-TV households) and 165 million mobile phone subscribers. The company
recently extended its operations to Sri Lanka. For the 14 month period ended 31
December 2006, turnover of Cellcast India amounted to Indian rupees 65m
(#780,000) with a loss before tax of Indian rupees 21.7m (#260,000). Net assets
at that date amounted to Indian rupees 30.0m (#350,000) including the
intercompany loan account of Indian rupees 44.7m (#520,000).
Cellcast SE Asia
Cellcast SEA Limited is a joint venture between Cellcast and mTouche Technology
Berhad and provides leading edge multi-platform digital entertainment
applications, formats and technology to the fast-developing South East Asian
region. Headquartered in Kuala Lumpur, Cellcast SE Asia has launched successful
participation TV shows on TV3, Malaysia's leading terrestrial broadcaster, and
will soon roll out interactive television and mobile programming throughout the
region. MESDAQ-listed mTouche is a leading provider of mobile messaging
technologies and interactive media applications in South-East Asia. Cellcast SE
Asia was established in September 2006, and for the 4 month period ended 31
December 2006, turnover amounted to HKD 1.6m (#103,000) with a loss before tax
of HKD 0.5m (#33,000). Net assets at that date represented a negative figure of
HKD 0.4m (#26,000) excluding Cellcast intercompany loan account of HKD 0.8m
(#53,000).
The Preferred Stock
The issue of the Preferred Stock is subject to closing which is expected to
occur not later than 21 August 2007. The Preferred Stock will on issue pay an
annual non-cumulative dividend of 8% per annum in preference to any dividend on
the ordinary shares of Cellcast Asia. It will carry equal voting rights to the
ordinary shares and will be convertible at any time into ordinary shares on the
basis of one ordinary share for one share of Preferred Stock. At the end of five
years from closing, Cellcast Asia may be required to redeem the Preferred Stock
at the higher of cost or fair market value and, in those circumstances, a breach
by Cellcast Asia of the redemption provisions in its articles of association may
trigger a right for the holder(s) of the Preferred Stock to put the Preferred
Stock on Cellcast plc. Purchase of the Preferred Stock under the put option
would be subject to the requirements of the AIM Rules for Companies and any
other applicable regulation or legislation.
- Ends -
For further information:
Cellcast plc
Andrew Wilson, CEO Tel: +44 (0) 20 7190 0300
andrew@cellcast.tv www.cellcast.tv
HB Corporate
Edward Hutton / Rachel Kane Tel: +44 (0) 20 7510 8600
e.hutton@hbcorporate.co.uk www.hbcorporate.co.uk
Media enquiries:
Threadneedle Communications
Graham Herring / Alex White Tel: +44 (0) 207936 9605
graham.herring@threadneedlepr.co.uk
Notes to Editors:
Cellcast plc
Cellcast plc (AIM: CLTV) is a leading international provider of participation
television applications and interactive mobile content in the fast-growing
multi-platform digital entertainment sector. Headquartered in London, with
associated operations in Paris, Beirut, Mumbai, Hong Kong and Sao Paolo,
Cellcast's applications and programming are distributed on the Sky Digital and
Freeview platforms in the UK, and the company is partnered with broadcasters and
telecom networks in Europe, the Middle East, India, South-East Asia, China, and
South America. Cellcast plc joined the AIM market of the London Stock Exchange
in 2005.
Canaan Partners
Canaan Partners invests in visionary entrepreneurs and provides them the
networks, insights and operational guidance required to build high-performance
technology and healthcare companies. For 20 years, they have taken an active and
committed role in the companies in which they invest, and have completed more
than 67 mergers and acquisitions and 51 IPOs. With $2.3 billion under management
and a worldwide footprint, the firm's technology team is committed to catalyzing
the growth of innovative companies in the digital media, communications &
mobility, enterprise and clean tech industries. Among its successes are
DoubleClick, the leading online advertising solution, Match.com, the most
popular online dating site in the world, and Acme Packet, one of the top ten
performing IPOs of 2006. Other Canaan technology investments include
SuccessFactors, The Active Network, Blurb, Dexterra, GroundWorks and ID
Analytics. Canaan has offices in California, Connecticut, India and Israel. For
more information visit: www.canaan.com
This information is provided by RNS
The company news service from the London Stock Exchange
END
MSCPUUQARUPMGMU
Cellcast (LSE:CLTV)
Historical Stock Chart
From Jun 2024 to Jul 2024
Cellcast (LSE:CLTV)
Historical Stock Chart
From Jul 2023 to Jul 2024
