21st Aug 2007 07:00
Cellcast plc21 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, announcedtoday the establishment of Cellcast Asia Holdings ("Cellcast Asia") to meet thestrong demand for interactive digital entertainment in the Asia and South-EastAsia regions. Cellcast is injecting its 100% holding in Cellcast Interactive India Pvt Limited("Cellcast India") and its 50% holding in Cellcast SEA Limited ("Cellcast SEAsia") into the new venture. At the same time, Cellcast has conditionally agreedto issue US$5.25m of Series A Preferred Stock (the "Preferred Stock") to CanaanPartners ("Canaan"), a global venture capital firm. The Preferred Stock issuevalues 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) comparedwith an investment cost of US$1.4 million (£0.7 million). Canaan will hold38.9%. The remaining shares are to be held by a trust which will administershare option plans for existing and future employees of Cellcast India. Andrew Wilson, CEO of Cellcast, said: "The investment by Canaan, a specialistinvestor in the information technology sector, confirms the strength of ourcommercial proposition. The opportunity in this region is of such a size that itexceeds Cellcast's ability to realise it alone. The investment by CanaanPartners is a strong endorsement of Cellcast's market-leading proprietarytechnology and applications, and recognition of the proven skills and sectorexperience of its established Asian-based management team. The establishment ofthis dedicated regional operation and its independent funding through CanaanPartners, is the most effective way for Cellcast plc to realise its growingAsian ambitions whilst retaining resources for reinvestment in othertechnological 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 managingcompanies in the computer, telecom and wireless sectors. The company will beheadquartered in Mumbai, India, and will serve a market of over 2 billionconsumers 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 Asiain developing significant demand for Cellcast's multi-platform interactiveformats 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 firstquarter of this year, taking the total to 165.1 million, and where the TVindustry is expected to grow at a compound annual rate of 22 per cent over thenext five years. Pankaj Thakar, Cellcast Asia's new CEO, said: "The rapid growth in mobilepenetration in the region, together with the continuing expansion of themulti-channel television industry, are creating major opportunities forCellcast's digital entertainment products. By combining the resources ofCellcast India with the strong market position of our partner mTouche, we arecreating a powerful regional distribution capability with a combined network ofrelationships with over 20 leading regional broadcasters and over 30 telecomsoperators. The exciting participation of Canaan Partners will enable us toaccelerate growth through investment in new formats and applications and theexpansion of our management team to support our regional initiatives." Alok Mittal, Managing Director - India, Canaan Partners, said, "With mobilephones fast becoming a general-purpose interaction device in the hands of nearlytwo billion consumers worldwide, interactive digital entertainment isincreasingly 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 mostpromising companies in this sector developing and distributing proprietaryapplications and television programming in markets across the world. The companyconstantly develops new formats for applications and interactive programmingsuitable for emerging media platforms including 3G, IPTV, enhanced broadband,mobile video and wireless broadband services. Cellcast is Canaan Partners' firstinvestment in the growing trend of value added services in India." Cellcast AsiaCellcast Asia Holdings is a holding company whose principal investments will beits 100% holding in Cellcast India and its 50% holding in Cellcast SE Asia. Cellcast IndiaCellcast Interactive India Pvt Limited was established in November 2005 as awholly-owned subsidiary of Cellcast plc and its first TV series launched inmid-2006 became a landmark in the Indian television industry. The company is apioneer in developing integrated participation content to address theentertainment demands of India's 112 million TV households (62% of which arepay-TV households) and 165 million mobile phone subscribers. The companyrecently extended its operations to Sri Lanka. For the 14 month period ended 31December 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 assetsat that date amounted to Indian rupees 30.0m (£350,000) including theintercompany loan account of Indian rupees 44.7m (£520,000). Cellcast SE AsiaCellcast SEA Limited is a joint venture between Cellcast and mTouche TechnologyBerhad and provides leading edge multi-platform digital entertainmentapplications, formats and technology to the fast-developing South East Asianregion. Headquartered in Kuala Lumpur, Cellcast SE Asia has launched successfulparticipation TV shows on TV3, Malaysia's leading terrestrial broadcaster, andwill soon roll out interactive television and mobile programming throughout theregion. MESDAQ-listed mTouche is a leading provider of mobile messagingtechnologies and interactive media applications in South-East Asia. Cellcast SEAsia was established in September 2006, and for the 4 month period ended 31December 2006, turnover amounted to HKD 1.6m (£103,000) with a loss before taxof HKD 0.5m (£33,000). Net assets at that date represented a negative figure ofHKD 0.4m (£26,000) excluding Cellcast intercompany loan account of HKD 0.8m(£53,000). The Preferred StockThe issue of the Preferred Stock is subject to closing which is expected tooccur not later than 21 August 2007. The Preferred Stock will on issue pay anannual non-cumulative dividend of 8% per annum in preference to any dividend onthe ordinary shares of Cellcast Asia. It will carry equal voting rights to theordinary shares and will be convertible at any time into ordinary shares on thebasis of one ordinary share for one share of Preferred Stock. At the end of fiveyears from closing, Cellcast Asia may be required to redeem the Preferred Stockat the higher of cost or fair market value and, in those circumstances, a breachby Cellcast Asia of the redemption provisions in its articles of association maytrigger a right for the holder(s) of the Preferred Stock to put the PreferredStock on Cellcast plc. Purchase of the Preferred Stock under the put optionwould be subject to the requirements of the AIM Rules for Companies and anyother applicable regulation or legislation. - Ends - For further information:Cellcast plcAndrew Wilson, CEO Tel: +44 (0) 20 7190 [email protected] www.cellcast.tv HB CorporateEdward Hutton / Rachel Kane Tel: +44 (0) 20 7510 [email protected] www.hbcorporate.co.uk Media enquiries:Threadneedle CommunicationsGraham Herring / Alex White Tel: +44 (0) 207936 [email protected] Notes to Editors: Cellcast plcCellcast plc (AIM: CLTV) is a leading international provider of participationtelevision applications and interactive mobile content in the fast-growingmulti-platform digital entertainment sector. Headquartered in London, withassociated operations in Paris, Beirut, Mumbai, Hong Kong and Sao Paolo,Cellcast's applications and programming are distributed on the Sky Digital andFreeview platforms in the UK, and the company is partnered with broadcasters andtelecom networks in Europe, the Middle East, India, South-East Asia, China, andSouth America. Cellcast plc joined the AIM market of the London Stock Exchangein 2005. Canaan PartnersCanaan Partners invests in visionary entrepreneurs and provides them thenetworks, insights and operational guidance required to build high-performancetechnology and healthcare companies. For 20 years, they have taken an active andcommitted role in the companies in which they invest, and have completed morethan 67 mergers and acquisitions and 51 IPOs. With $2.3 billion under managementand a worldwide footprint, the firm's technology team is committed to catalyzingthe growth of innovative companies in the digital media, communications &mobility, enterprise and clean tech industries. Among its successes areDoubleClick, the leading online advertising solution, Match.com, the mostpopular online dating site in the world, and Acme Packet, one of the top tenperforming IPOs of 2006. Other Canaan technology investments includeSuccessFactors, The Active Network, Blurb, Dexterra, GroundWorks and IDAnalytics. Canaan has offices in California, Connecticut, India and Israel. Formore information visit: www.canaan.com This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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