TopTV rescue may cost IDC millions
THE state-owned Industrial Development Corporation is facing a R477-million court demand from one of the empowerment shareholders in the former TopTV.
Legal papers have already been lodged in the High Court in Johannesburg in which First National Media Investment Holdings is claiming this amount from the IDC, saying the stateowned company took the shares without paying for them.
TopTV went into business rescue in 2012, before re-emerging under the banner of StarSat. The pay-TV channel’s holding company is On Digital Media, in which a number of empowerment parties, including First National Media, held shares.
These companies borrowed money from the IDC to buy the shares and when TopTV went into rescue, the IDC reclaimed the shares to settle the loan.
Then it got messy: the IDC took First National Media to court, claiming R293-million for the outstanding loan. Now, the company has counterclaimed for R477-million, saying the value of its 20.4% stake seized by the IDC far exceeded the loan.
“The IDC is in the process of preparing its plea to the counterclaim,” said Karabo Motshwane, a director at Werksmans, representing the IDC.“We will then apply for a trial date after close of pleadings.”
However, First National Media produced an “independent valuation” of those shares, dated January 15, which has now been submitted to court. It said it had a deal with the IDC that its claim would be postponed “indefinitely” until an independent accoun- tant had valued the shares. After a valuation by Ernst & Young fell apart, it appointed Johannesburg accountant Rob Theunissen to value the stake.
Theunissen worked out that in October 2013 On Digital Media was worth R2.34-billion — which meant a 20.4% stake would have been worth R477.3-million. He used expected free cash flows, discounted into the future, to arrive at this number.
His numbers are likely to come under heavy scrutiny.
Meanwhile StarTimes, a Chinese firm that holds a 65% economic interest and 20% equity stake in On Digital Media, is still awaiting regulatory approval for the licence that will allow it to offer signal distribution services. Completion of the business rescue process, which includes a R1.3-billion investment from StarTimes, hinges on this.