News blog
Parallel Media Group
- BY: Andrew Hore |
- POSTED: 30/06/2010 |
Sports marketing group Parallel Media Group is trying to sort out its balance sheet and snare a new investment.
PMG has extended £1.7m of its convertible loans from July 2010 to the end of 2012. These include loans from PMG chairman David Ciclitira.
PMG has issued more than 447m shares to lenders in respect of the redemption premium and a further 84.7m shares representing interest due. This represents 53.2% of the enlarged share capital. Ciclitira has increased his stake to 33.8%. There are nearly 1bn shares in issue.
There could be more after the extension payment is made. This is equal to 8% interest per annum plus 10% of the principal. This amounts to £500,000, which can be paid in cash or shares at 0.25p each (the conversion price) at Parallel’s option. That share price is well below the current market price.
PMG is still talking to lenders owed £610,000 about a similar arrangement.
PMG is in talks with a potential investor and if this investment goes ahead the loans will have to be converted into equity. This conversion, if it happens, will more than double the shares in issue by creating more than 1.4bn shares. That is before any shares are issued to the new investor.
Turnover increased 8% to £10.2m in 2009. A loss of £270,000 was turned into a profit of £65,000. This was due to a reversal of a £160,000 provision relating to the administration of RAM Media.
The RAM administrators won a case against the Greek government. In March 2010, the administrators paid PMG £274,000 out of a total agreed claim of £585,000.
There was a small cash outflow in 2009 before changes in borrowings. Net debt, excluding convertibles, was £909,000 at the end of 2009.
At 0.42p, up 0.025p, PMG is valued at £1.99m.
Former IMG director of sponsorship Stewart Mison has been appointed group managing director.
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