Case Study: Business rescue advisory services
Broadcasting & Entertainment
Nimble Group advises a Consortium on an
offer to Top TV’s Business Rescue Practitioner
THE CLIENT
A local BEE Consortium
INDUSTRY
Braodcasting and PayTV
BUSINESS NEED
To submit an offer to the BRP
to acquire the TopTV business.
To retain a South African
investor and ownership
footprint.
Background
The Board of On Digital Media (Pty) Ltd (trading as “Top TV”) considered that the company was financially
distressed and voluntarily began business rescue proceedings in October 2012, as contemplated in chapter
6 of the Companies Act No.71 of 2008 (the “Act”).
StarTimes Communications Network Technology Co. Ltd (“StarTimes”), a foreign Pay TV company, made an
offer to the Business Rescue Practitioner (“BRP”) to acquire a shareholding and economic interest relating
to licenses in the Top TV business. This offer - which was to expire on 30 April 2013 - was accepted by the
BRP and included in the business rescue plan that was published on 19 April 2013. This plan was to be
considered at a meeting of creditors to be held on 30 April 2013 (Section 151 of the Act: Meeting to
determine the future of the company).
Following the publication of this plan a local BEE consortium (“The Consortium”) decided it too would
submit a formal offer to the BRP for his consideration. Nimble Group was engaged by the Consortium as
lead providers to this process.
The Challenge
Significant challenges for the Consortium in respect of the business rescue proceedings included the
following:
Meeting of Creditors “Decision Day”
The following events occurred on 30 April 2013 at the Section 151 meeting of creditors:

The Act does not provide for a process that is to be followed where an unsolicited offer is made to
the BRP, after publication of the plan.

Because the StarTimes offer had a definitive expiration time ending on this date, it made an
adjournment of the meeting problematic.

The StarTimes offer had secured an exclusivity period up to the date of this meeting that
precluded the BRP from discussing any details of the business with alternative bidders, until after
the end of the exclusivity period.

The published business rescue plan was considered and voted on.
Operational and Other Considerations

The ‘Payment Holiday’ agreed to by various Top TV content providers also terminated on the date
of the Section 151 meeting date.

Top TV was technically insolvent and had no access to additional cash flow required to keep the
business operating beyond 1 May 2013.

Essential to the success of the Consortium’s offer was the securing of support from the relevant
Development Finance Institutions (“DFI’s”), such as the IDC and DBSA, as affected persons, for,
either an adjournment of the Section 151 meeting or acceptance of the Consortium’s offer.

The eventual deal structure of the Consortium’s offer would be subject to the regulations of the
relevant regulatory bodies, including the Independent Communication Authority of South Africa
(“ICASA”), and The Competition Commission of South Africa, as well as the provisions of the
Electronic Communications Act.
www.nimblegroup.co.za
Issue date: May 2013
NIMBLE GROUP SOLUTION
Prepare an offer that would
rally the support of affected
persons.
Postpone the meeting of
creditors to allow the BRP and
affected parties to consider
the Consortium plan.
Nimble Group Solution
Nimble Group’s solution included the preparation of the Consortium’s offer to be presented to the DFI’s,
material shareholders, creditors and funders. The aim of this offer was to rally the support of those parties
in order to postpone the Section 151 meeting, by way of an adjournment or to reject the BRP’s plan
incorporating the StarTimes offer. The Consortium’s offer was initially more lucrative to creditors than the
StarTimes offer and ultimately more beneficial for all stakeholders, and complied with the relevant
legislative and regulatory requirements.
The aim of securing the irrevocable support from the DFI’s and material creditors, and the resultant
postponement of the section 151 meeting, would allow for:

the Consortium to formalize an unconditional offer (pending the termination of the exclusivity
period);

allow the Top TV business to continue its operations without interruption; and

permit the BRP to include the Consortium’s offer in a revised business rescue plan for
consideration by the affected persons at a Section 151 meeting to be held at a later date.
Nimble Group was instrumental in facilitating numerous interactions between the BRP and the
Consortium, as well as Legal Counsel, the current shareholders and funders.
BUSINESS IMPACT
Consortium offer was
announced and considered at
the meeting of creditors, but
was not accepted.
Business Impact
The Consortium offer was announced by the BRP at the Section 151 meeting, during which time it was
considered by the various affected persons. The Consortium’s offer was, however, not accepted by way of
a vote by creditors who, in turn, voted in favour of the StarTimes offer.
So what conspired against the Consortium’s plan?

The StarTimes offer would expire unless accepted at the Section 151 meeting.

The exclusivity in favour of StarTimes restricted access to vital information.

The Consortium was unable to secure the support of the DFI’s and creditors.
CONTACTS
Grant Krog, Executive
Director
+27 11 253 7249
[email protected]
Trevor Murgatroyd, Director
+27 82 461 8781
+27 11 253 7225
[email protected]
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