TopTV will be effectively taken over by China's StarTimes already operating pay-TV services in several African countries and giving StarTimes and China with deep pockets its first - and very important - foothold in South Africa, the continent's most sophisticated, developed and lucrative satellite pay-TV market.
TopTV's television content partners threatened finally leave ODM if a deal wasn't voted through today, which would effectively have seen the TopTV service go dark exactly three years since it started its commercial pay-TV service on 1 May 2010.
TopTV owes Fox International a massive R43,8 million which amounts to 3% overall of TopTV's debt to creditors. Warner Bros. is owed R25,4 million or 1,7% of the total, Paramount is owed R13,1 million and Manchester United Television is owed R9,5 million which now shows why the MUTV channel was suddenly yanked in November 2012.
TopTV also owes Turner Broadcasting System R6,4 million which is why Turner's channel's suddenly disappeared in December 2012 when Silver, Showtime and Star! was yanked. Of course Top Junior and Top Movies +24 was suddenly discontinued earlier in April. TopTV also owes The Walt Disney Company R7,2 million.
In total ODM owes about R1,5 billion to creditors combined.
The StarTimes cash-flush rescue will not just keep the TopTV lights on and prevent liquidation immediately, it will also return TopTV to a solvent state for a minimum of the next three years.
TopTV was overspending at the pace of R25 million per month by October 2012.
ODM wants to start a separate TopTV porn bouquet of three sex channels with a R18 rating supplied by Playboy TV UK / Benelux Limited in England and got approval from South Africa's broadcasting regulator, the Independent Communications Authority of South Africa (Icasa) to to do.
TopTV workers are scared of the Chinese and the StarTimes bail-out; fearing job losses and bad Chinese TV content.
While a vote majority vote of at least 75% is needed to approve a business rescue bail-out plan, a whopping 99% of ODM's creditors and current shareholders which include the Industrial Development Corp (IDC), Development Bank of Southern Africa, the National Empowerment Fund and the European satellite operator SES, voted in favour of the StarTimes business rescue plan.
Dynamic TV which suddenly popped up as a contender to bail-out TopTV on Sunday - enabled through a loan of R100 million and massive capital backing from MultiChoice which is actually ODM's rival - tried desperately to keep TopTV out of Chinese hands. Dynamic TV would have paid creditors 20c for every rand of debt as opposed to the 10c per rand from StarTimes.
MultiChoice was willing to invest R30 million in TopTV per month to prevent what now effectively means a take-over by StarTimes of the TopTV service. StarTimes will install its own CEO according to its business plan.
The third bidder who suddenly emerged on Monday night was the Wananchi group of Kenya which is running the successful and growing pay-TV service Zuku in Kenya, Ethiopia, Rwanda and Malawi.
Both Dynamic TV and the Wananchi group seems to have taken too long to put in their offers. Shareholders already saw the StarTimes business rescue plan and had time to go through the details, and StarTimes was seen as the last and only remaining safety line to prevent TopTV from going under.
Shareholders were desperate for a possible deal from a new capital investor and wasn't aware of Dynamic TV and the Wananchi group's offers until 48 hours and less than 24 hours before the crucial business rescue vote.
The StarTimes deal which also offered TopTV a way out to prevent liquidation, made it very clear to ODM that StarTimes was not going to entertainment amendmends to the existing business plan and would immediately exit if shareholders voted no, or not for, StarTimes' offer today on the last day of April.
Meanwhile StarTimes had already done due diligence, blasted TopTV's terrible business practice and mistakes, and issued clear goals of how it wants to transform TopTV bad pay-TV service which - given the precarious position TopTV is in - made shareholders feel safer opting for the StarTimes deal as opposed to the other new two bidders.
TopTV's business rescue plan from StarTime was preliminary adopted by an overwhelming majority of 93,9% of creditors that voted and the business rescue plan was thereafter adopted by a unanimous vote of preferential shareholders (100%) and a majority vote of ordinary shareholders (99,3%) in favour.
ODM's business rescue officer says the newly adopted business rescue plan is binding on TopTV, all the creditors as well as the shareholders.
ODM in a press statement says that Peter van der Steen, ODM's business rescue practitioner "is now required to take all necessary steps to satisfy all creditors and implement the adopted business rescue plan."
