Mr. R.M. Denny went on to say that Rediffusion had now received a firm offer, subject to Government approval, for 61% of the share capital of RTV from an Australian consortium and it was hoped that the Board would support this transfer.
Mr. R.M. Denny explained that as negotiations had been finalised only that morning, there was not enough time to present a paper on the matter to the Board. Mr. Denny went on to outline the arrangements as follows:-
a)
The Consortium would be made up of the following three prominent publicly quoted companies in Australia:
i) David Syme and Co. Ltd.;
ii) Henry Jones (IXL) Limited; and iii) CRA Limited.
b) The intention of the Consortium would be to set up a
Hongkong company with 1/3 of the shareholding held by each party. This company would hold the shares in RTV;
c) Rediffusion would take over the bank overdraft and
the loan from Rediffusion (Hongkong) Ltd. totalling $223 million;
d) RTV's assets would be worth $60 million as a result of
these arrangements;
e) The Consortium would pay Rediffusion $40 million
for the shares of RTV. The Consortium had wanted to take over the entire Rediffusion shareholding but Rediffusion had decided to maintain a substantial shareholding of 20%;
f) The Consortium would procure $30 million as working
capital for RTV for the next few years;
g) of the $223 million of debts taken over by Rediffusion
$70 million would be converted into a Deferred Subordinated Loan to give Rediffusion some chance of repayment for some of the debts taken over if large profits were to be made by RTV in the future;
h) Should Government in the future require larger percentage
of shareholding to be held by local shareholders Rediffusion would sell part or all of their holdings at a fair value;
i) The Consortium would purchase Television House from
Hongkong Television Ltd. and a new lease would be negotiated with RTV at market rental rates.
}