Rescue ends, troubles go on at beleaguered StarSat

STARSAT, formerly TopTV, has quietly slipped out of a business rescue process that has been running for the past four years — while the company’s struggles to retain customers, channels and money have continued.

Peter van den Steen, the courtappointed consultant who managed the business rescue, told the Companies and Intellectual Property Commission last month that he had decided to terminate the process.

“There are no longer reasonable grounds to believe that the company is financially distressed,” Van Den Steen said in a letter to the commission.

This week, Van Den Steen said he had no further comment. StarSat did not respond to questions this week.

Lawyer Haroon Laher, a director at Norton Rose Fulbright who worked on finding new investors, confirmed that a notice of termination was filed three weeks ago.

“It was a very long, drawn-out process. It wasn’t an easy process,” Laher said this week.

“The business rescue is now terminated and completed in all its respects as foreshadowed in the business rescue plan that was adopted by creditors and shareholders.”

But the troubled broadcaster may still face an uphill battle to regain lost ground in the pay-TV market, which has made headway with the licensing of five new pay-TV entrants, although the industry regulator is still investigating a lack of competition in the market.

Arthur Goldstuck, founder of World Wide Worx, said: “StarSat is the proverbial train wreck in slow motion — although in very, very slow motion.” He said all indications were that its subscriber base had not recovered significantly after collapsing from around 140 000 in 2012 to around 110 000 in 2014, “although it’s hard to tell, given the lack of communication from the broadcaster”.

Launched as TopTV in 2010, the broadcaster was intended to rival Naspers-owned DStv which has grown into a giant operation servicing 5.7 million subscribers in its South African home market.

TopTV initially thrived, signing up more than 300 000 subscribers to its less-costly packages less than two years into the launch, but it filed for business rescue in November 2012 after failing to secure additional funds for investment.

It had launched with R1-billion from the Industrial Development Corporation and Development Bank of South Africa and several smaller shareholders.

Shareholders Mergan Moodley and First National Media Investment Holdings, led by founding TopTv CEO Vino Govender, challenged the implementation of the business rescue plan but later dropped the case.

In 2013, shareholders agreed to sell shares to Chinese firm StarTimes Media, and this year the transfer of the pay-TV licence to the Chinese firm was approved.

Recent challenges include the loss of the popular BET channel when DStv expanded its version of BET to low-end package customers, and the loss of rights to NBA games at a time when interest in US basketball is growing in South Africa.

Goldstuck said: “It appears that it does not have the bargaining power to hold on to the more desirable channels.”