3rd Jul 2006 10:02
Media Steps Group PLC03 July 2006 Media Steps Group plc Disposal of trading subsidiaries On 27th June 2006 Media Steps Group plc ("Media Steps" or the "Company")announced that discussions with potential investors had been exhausted and thatthe Board continued to hold discussions with companies that might be interestedin acquiring the Company's two trading subsidiaries, Media Steps (UK) Limitedand Media Steps (Sports) Limited, or the businesses and assets thereof. These negotiations have now been concluded and the Company today announce MediaSteps (UK) Limited and Media Steps (Sports) Limited have been sold for aconsideration of £1 to an unconnected party, with the purchaser agreeing toassume debts of approximately £145,000. The sale includes the rights to allpatents owned by the Group and the rights to operate the 386 PosterStep sitescurrently installed. As part of the arrangement Media Steps will write off intercompany indebtedness amounting to approximately £1,209,459. Net assets of thetwo subsidiaries sold are estimated at £248,201 after elimination of theinter-company indebtedness, including goodwill of £175,000. With unauditedturnover of £160,000 for the 12 months ended 31 March 2006 well short ofbreak-even, the Board concluded it was not possible to continue to trade whilebearing such losses. The successful disposal of the two subsidiaries leaves the Company with net cashof approximately £110,000. All Company Directors, with the exception of one,have agreed to waive their rights under the service contracts and to deferremuneration until further notice. The Board now intend to commence negotiations with the holders of £330,000 ofConvertible Loan Notes with a view to agreeing a basis of conversion, and intendto send a notice of EGM to their shareholders in which they will seek approvalof an investment strategy going forward. Given the timing of the offer for thesubsidiary and the financial position of the Company, it has not been possibleto seek shareholder approval for the disposal. Commenting on the announcement Chief Executive Tony Jansen said: "We are very disappointed that we have not managed to implement, with the fundsavailable, our strategy to create a new medium in the Outdoor Advertisingmarketplace. Our sales have fallen substantially short of our plans and we havebeen unable to persuade the two major Outdoor Advertising buying agencies toinclude us in their plans. We now turn our attention to ensuring that our remaining resources and our AIMquotation can still deliver value to shareholders" Enquiries: Tony Jansen, Media Steps Group plc, Tel: 01234 828811 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
PTCM.L