Vision Media takes loan from ‘friends and family’
VISION Media Group, the outdoor media company, been forced to raise working capital from directors’ friends and family at a 100% premium, while the sale of its Train TV business for more than £2m goes through.
The Cheadle-based, AIM-listed company says it is in advanced negotiations to sell Train TV to New Planet Investments, a vehicle established to acquire the company, for between £2.1m and £2.6m.
For the year to the end of December 2007 Train TV made a loss of £561,612 on turnover of £34,169 and had net liabilities of £1,630,646.
Vision Media executive chairman Mike Cottman also has a holding in NPI, which itself has been backed by AIM-listed RAM Investment Group Plc and has an option to acquire NPI at the same time that NPI acquires Train TV. The transaction is expected to complete in the second quarter of 2009.
But in its statement to the stock market the company added that the “extreme length of time” taken to complete the sale, Vision Media had been “forced to raise additional funding” of £225,000 from family and friends, executive management and new investors.
The loans – at a 100% premium – are to be repaid at the end of June 2009.
Also, Mr Cottman has increased his existing loan account with the company, injecting a number of loans to a total of £542,477 over the past few months.
“Mr Cottman’s loan account, including all capital sums invested, assorted premia and accumulated interest, now stands at a total of £1,850,000 and reflects the company’s failure to repay loans as previously agreed. Repayment of these loans will start in 2009 at such time as the company can afford to commence repayments,” it said.
In a separate trading update the company said that total advertising spend on bookings received to date by CCUK, which it has a ten year contract with, exceeds the entire national sales shopping mall advertising revenue earned by the company in 2008 and that the available airtime for national advertising on its new portrait panels is sold out for March.
It added that demand for the Iconic Pod panels has been brisk with national brands such as SkyTV, Unilever, Fox Films, 3-Mobile, and UK Living all running campaigns.
Both the Cheadle and London offices are in the process of relocating to less costly premises, which along with the sale of the TrainTV business will generate overhead savings to the company of around £500,000.
Mr Cottman said: “The result of dramatically reducing our costs and introducing a number of new outsourced revenue streams is that we have a radically different business model which is now extremely scalable and can now be leveraged into a growing and profitable business.
“The company remains optimistic that it can meet the current liquidity challenges of the next few months and trade through to reach the point in the company’s history where it can develop sufficient cash to leverage the new model into a growing and profitable business.”
