BREAKING. TopTV came thisclose to shutting down in July; StarTimes has pumped R30 million into ODM already and now gets the content.

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The struggling On Digital Media's (ODM) precarious TopTV service came thisclose to shutting down at the end of July 2013; China's StarTimes has already funneled more than R30 million into the South African satellite pay-TV operator's operations, StarTimes has taken on the role of assimilating TV content for TopTV and StarSat promises to provide better TV content at more competitive prices to South African viewers.

These and other startling "new" facts are now coming to light, buried in new court documents submitted to the South Gauteng High Court.

The new court documents submitted by ODM's business rescue practitioner Peter van den Steen, follows after unhappy and exasperated ODM shareholders launched an urgent court interdict to stop what it calls permanent and "dangerous" changes to the operations, distribution, structure and content of On Digital Media and its new StarSat pay-TV product the company is launching with StarTimes as its new financial and content backer.

In court documents Peter van den Steen calls the court application of First National Media Investment Holdings (FNMIH) and Atchuthandandan Moodley - the shareholders bringing the application for an urgent court interdict - "ill-conceived".

Peter van den Steen says any interdict granted to prevent him from proceeding with ODM's business rescue plan will "undermine the successful implementation of the plan" and warning that there is "no doubt that, if the business rescue plan is not implemented, I will be required to apply for the liquidation of ODM".

ODM shareholders are alarmed and upset by what it calls big irreversible changes to ODM and TopTV's content and signal distribution, the operations of which were largely turned over or has now been "outsourced" to StarTimes.

"If I had not taken the action that I took, the business would have failed and the rescue would have become unachievable," says Peter van den Steen.

ODM came this close to losing the ability to broadcast TopTV when SES, the company from which ODM leased space on a satellite, in July 2013 decided to terminate ODM's transponder lease and uplinking contract.

"SES communicated to me that ODM had until 31 July 2013 to pay the outstanding rentals due in terms of the lease, failing which SES would shut down their transponders. This would have led to a complete shutdown of ODM's services to its subscribers," says Peter van den Steen.

"StarTimes then entered into negotiations with SES for the continued use of the transponders. SES was prepared to conclude a comprehensive deal with StarTimes internationally, which would avert the shutdown of ODM's services."

The business rescue practitioner says transferring the lease from ODM to StarTimes was a practical measure needed to ensure the continued operation of ODM. "The transfer of the lease to StarTimes serves to protect the effective operation of ODM."

"If the uplinking contract had been terminated, this would have interrupted the broadcasting services provided by ODM to its subscribers."

About ODM's new billing system which has been introduced for StarSat the business rescue practitioner says "the new billing system allows for a customer to be reconnected or for a new customer to be connected within a matter of minutes as opposed to the hours it took under the old billing regime."

Regarding claims by ODM shareholders that "the control of all material broadcast into South Africa is now under foreign control", the business rescue practitioner says "ODM retains a fully staffed content department headed by Ian Woodrow."

Peter van den Steen reveals that "StarTimes has taken on the role of assimilating content for ODM" which means that ODM "now has access to StarTimes' wide bouquet of channels worldwide".

"As such ODM has been placed in a better position to compete with other pay-TV providers in South Africa. The arrangement between StarTimes and ODM will ultimately enable ODM to provide better content offerings at more competitive prices."

"StarTimes has invested substantial amounts towards the improvement of the business and getting the business ready to compete once the business rescue is implemented. StarTimes has, to this end, invested an amount in excess of R30 million."


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China's StarTimes possibly bailing out On Digital Media's struggling TopTV pay-TV service in South Africa with a capital injection.

On Digital Media (ODM) which is currently in business rescue and runs the TopTV satellite pay-TV service in South Africa is hoping that China's StarTimes media group which is already operating pay-TV services in 8 African countries will hopefully bail out the struggling Woodmead-based pay-TV operation with a capital injection and become an equity partner.

ODM declined comment when I asked last week about the StarTimes offer and possible deal, when a business plan will be released and when a new capital injection partner will be closed.

ODM received a signed conditional offer from StarTimes, a Chinese company which was started in 1998 as a technology company, has about 2,1 million subscribers across Africa, and is aggressively seeking to become a global leader in digital television services.

The StarTimes invested in digital television and pay-TV services and is currently operational in at least 8 African countries such as Nigeria (where it passed 1 million subscribers last year), Tanzania, Kenya, Rwanda, Uganda, Guinea, the Central African Republic (CAR), Burundi - and possibly quite soon also South Africa. StarTimes already has registered local companies in 16 African countries.

A possible StarTimes deal with ODM will give China its first real foothold in Africa's best developed pay-TV market dominated by MultiChoice and its DStv satellite pay-TV service. StarTimes already invested millions of dollars in the African pay-TV and digital television market and runs a lot of the same TV channels across various pay-TV bouquets across the continent.

Before ODM filed for business rescue at the end of October 2012 to prevent liquidation, the pay-TV business incurred a burn of expenditure over its income of R25 million per month.

ODM filed for business rescue in October, desperately looking for local investment backers to take an equity stake in the troubled pay-TV operator after its largest shareholder declined to inject any more money into the struggling operation.

TopTV will in May will be three years old since it launched its commercial operations in May 2010 with great fanfare but has since seen the company's fortunes decline. The business has since cut back on marketing and other overhead expenditure since entering business rescue, and has lowered the burn rate with the participation of trade creditors and content providers.

This also led to content cut backs such as the axing of certain TV channels - Top Junior and Top Movies +24 is for instance the latest two TV channels immediately being dropped from TopTV's channel line-up.

The proposed plan is for ODM to publish a business rescue plan this week.

According to Peter van den Steen, the business rescue practitioner appointed to try and help ODM out of business rescue, a possible rescue proposal from StarTimes was finalised at the end of March. This will give StarTimes a stake in ODM and the TopTV service.

Details of the structure of the StarTimes proposal will appear in the business rescue plan which will be published possibly sometime this week if StarTimes is able to fulfill the preconditions of the rescue proposal.

TopTV aims to publish a business rescue plan for the struggling South African pay-TV operator by the end of March.

The struggling On Digital Media (ODM) running the TopTV pay-TV platform in South Africa which is currently in business rescue and and is urgently looking for cash, aims to publish a business rescue plan by the end of March.

About R1,4 billion has been sunk into the Woodmead based pay-TV business which launched its commercial service almost three years ago in May 2010.

Since then ODM has become "financially distressed" and its major shareholders, the Industrial Development Corporation (IDC) and The National Empowerment Fund (NEF) are no longer prepared to inject any further funding into ODM.

Neither were prepared to extend a bridging fascility to ODM to enable it to operate within the "protective bubble" of business rescue as the pay-TV operator tries to restructure itself and attempt to prevent liquidation.

During December 2012 ODM's business rescue practitioner, Peter van den Steen, was approached by three separate interested parties who expressed interest in acquiring an equity interest in ODM since the company entered business rescue under the Companies Act at the end of October 2012. One withdrew in January.

In February one of the parties sent a written formal offer, and Peter van den Steen received another two expressions of interest. TopTV's aim is now to publish a business rescue plan based on offer(s) received from successful bidder(s) by the end of March.

According to TopTV which is currently being led by the interim CEO Eddie Mbalo, discussions are "at an advanced stage" with an announcement which would be made soon.

This past Thursday at TopTV's public hearing before South Africa's broadcasting regulator, the Independent Communications Authority of South Africa (Icasa) to start a separate porn bouquet of channels, ODM told Icasa that it now has 250 direct employees.