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Quickflix finds $5m new funding but shareholders need to approve the deal
[Wed 02/01/2013 08:54:28]
By Brendan Swift
Online and DVD rental company Quickflix ended its short-term funding woes in late-December after attracting a $5 million loan from international investors.
But the deal, which will result in entrepreneur Alki David and FilmOn.TV Asia president Tim Boyd joining the Quickflix board, has come at a substantial price for shareholders, who will need to approve the terms in February.
Quickflix will immediately draw down $1.5 million followed by two tranches of $1.75 million in February and March. However, that will only occur if shareholders approve the issue of convertible bonds to replace the loan - after a minimum of six months from the first drawdown the investors can convert the outstanding loan balance to Quickflix shares at a 20 per cent discount to the 30-day volume-weighted average price. The loan itself will also attract interest at commercial rates.
Despite the onerous terms of the $5 million loan, it secures the short-term future of Quickflix while it restructures. In late November-2012, it entered a trading halt while searching for new investors to stem its severe cash outflows. During the month, Quickflix chief executive Chris Taylor resigned, as did non-executive director and deputy chairman Justin Milne and HBO-elected board representative Henry McGee. (Time Warner's HBO took a $10 million stake in Quickflix in February.)
Billionaire British entrepreneur Alkiviades 'Alki' David holds several media investments including FilmOn.TV Networks. In a statement he said: “My investment in Quickflix and to join its board is representative of my significant investments in digital streaming and IPTV. Quickflix represents a key investment for me and the growth potential for the company in the Asia Pacific market and beyond is staggering”.
In 2010, Tim Boyd played a key role in the public listing of talent agent and production company RGM Media. He was chairman of Biosignal, the company which became RGM Media, and was paid a $150,000 success fee for arranging the RGM deal and $70,000 in consulting fees according to documents released at the time. He left shortly after the float and was paid a $350,000 termination fee. RGM Media was delisted in 2012 after a disastrous two years in which it burned through its cash reserves.
Contact this reporter at bswift@if.com.au or on Twitter at @bcswift.
[Wed 02/01/2013 08:54:28]
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