21st Jan 2010 11:26
21 JANUARY
Entertainment One Ltd.
Announcement of Repurchase of Exchangeable Notes and Placing
Entertainment One Ltd. ("E1" or the "Company") is pleased to announce the conditional agreement to repurchase ("Repurchase") exchangeable notes with a principal value of £14.5 million (the "Repurchased Notes") for a total consideration of £9 million (the "Total Consideration"). The Repurchased Notes are held on the Group's balance sheet at an estimated aggregate value of £16 million (representing the sum of the net principal value and accrued interest to date).
As a result, there is an expected £7 million pre-tax gain to the income statement in the year to 31 March 2010. The Group will also no longer incur interest on the Repurchased Notes that had been expected up to maturity. Together, this will provide additional upside to the earnings of the business following the trading update issued earlier today.
The Total Consideration represents more than a 60% discount to the total expected value of the Repurchased Notes at maturity in September 2013.
Exchangeable notes (including the Repurchased Notes) (the "Notes") with a principal value of £19.6 million were originally issued to part fund the acquisition of E1's Benelux subsidiary in January 2008 and accrue interest at 10% per annum. Following the Repurchase, Notes with a principal value of £5.1 million remain outstanding with investors (the "Remaining Notes"). The rights attaching to the Remaining Notes are unaffected by the Repurchase.
Darren Throop, CEO of E1 said "This is a great opportunity to deleverage our balance sheet at a significant discount to the carrying value of the exchangeable notes. Alongside our strong trading performance this further reinforces the strength of the group as we enter 2010."
The Company also announces today that it has raised up to £10.3 million of equity by way of a placing of up to 19,499,400 new Ordinary Shares in the Company (the "Placing Shares") at a price of 53 pence per share, the net proceeds of which will be used to fund the Repurchase. The new Ordinary Shares will rank parri passu in all respects with the existing Ordinary Shares.
The Repurchase and the issue of the Placing Shares are conditional upon bank approval from E1's senior lenders. Completion of the Repurchase and the admission to trading of the Placing Shares is expected to take place no later than 2 February 2010. Immediately following admission of the Placing Shares to AIM, the Company's issued share capital will consist of 151,572,278 ordinary shares and 15,975,080 Class S shares.
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Enquiries Quiller Consultants |
John Eisenhammer |
020 7233 9444 |
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Entertainment One |
Giles Willits |
020 7907 3773 |
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Singer Capital Markets Limited (NOMAD and joint broker) |
James Maxwell/Richard Savage |
020 3205 7500 |
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Cenkos Securities plc |
Stephen Keys/Alex Aylen |
020 7397 8926 |
Notes:
Entertainment One Ltd. (AIM: ETO) is a leading independent entertainment content owner that acquires film, television and music rights and exploits these rights in all media in more than 190 countries. The company currently operates in Canada, the U.S., the UK, Holland and Belgium through its two divisions: Entertainment (comprising Television, Film and Music) and Distribution. These businesses collectively represent E1's extensive expertise in film distribution, television and music production/distribution, Kids content, Licensing and Distribution. E1's content library includes more than 4,000 feature films, 2,800 hours of original television programming and 15,000 music tracks.
Related Shares:
Entertainment One