Celtic Vision sounds out potential investors
THE troubled television company CelticVision has said it is in negotiation with a number possible new investors about an cash injection of up to $5 million (£3.1 million).
The High Court appointed an interim examiner to CelticVision, which has accumulated losses of £3.7 million, last Friday and discussions between its owners and the possible new investors have continued throughout the week.
"We are extremely happy with the progress of negotiations to date," CelticVision's founder and largest shareholder, Mr Robert Matthews, said yesterday. He said he could not reveal the identity of the new investors.
CelticVision, which has offices in Dublin and Boson, buys programmes from RTE, BBC NI and independent producers and rebroadcasts them on its Irish cable service in the Boston area.
The company, which was launched in March 1995, was placed in examinership by its directors, whose counsel told the court that there was an identifiable possibility that the company could survive as a going concern. The petition for an interim examiner was supported by CelticVision's only secured creditor.
It is thought likely that any new investor will take an equity stake in CelticVision, while its current backers would dilute their existing holdings.
It is understood that, under the rescue plan, which would have to be approved by the examiner, creditors would be paid 100p in the pound, but payments may be deferred for a particular period. The interim examiner, Mr Jason Sheehy, of Cooney Carey accountants, is due to return to court on Monday, when his position is thought likely to be confirmed.
Mr Matthews said that the new equity "would be used to facilitate the nationwide distribution" of the CelticVision channel. He added that the company had signed a national distribution agreement in May, which would give the service access to 2.7 million US homes in areas such as Cleveland and the New York suburbs of Queens and the Bronx.
It also includes Long Island, which, at 412,000 homes, claims to be one of the largest cable franchises in the world. The previously unannounced agreement with Cablevision Systems, which carries CelticVision in the Boston/Brookline area, "is a clear indication of the quality of the service", said Mr Matthews.
CelticVision ran into cash flow problems after it failed to meet its initial revenue projections due to lower than expected advertising revenue and subscription sales. The High Court heard that the company is losing £47,000 a month despite the temporary layoff of 12 employees in Ireland and 10 in the US. Twenty two people are currently employed by the company, which hopes to have a staff of 60.
One of the possible investors is the Boston based venture capital company Donegal Ventures, which the High Court was told was willing to invest $500,000 in CelticVision during the period of the examinership. Donegal Ventures, which is headed by Boston based businessman Mr Lawrence Baker, has interests in the publishing, software and information technology sectors.