News Network Corporation Public Company Limited (NEWS) has made an announcement that the company will remain holding 100% of shares in Spring News Television Co., Ltd. (SPTV) despite the approval from the Board of Directors the extraordinary general meeting of shareholders on selling the shares to TV Direct Public Company Limited (TVD)
Pursuant to the memorandum of understanding dated September 24, 2018 between Spring News Corporation Co., Ltd. (SPC), a subsidiary of NEWS, and TTVD, SPC will sell 90.1% of shares in SPTV to TVD. Subsequently, the board of directors of NEWS in the board meeting and the extraordinary general meeting of shareholders resolved to approve the deal.
After the approval, SPC and TVD had negotiated the terms in the share purchase agreement for 90.1% of shares in SPTV. SPC and TVD had also consulted and planned on the transfer process of the management in the television station of SPTV to TVD but such transactions have yet been completed. Therefore, both parties have yet signed the share purchase agreement, and there were no share transfer and payment of purchase price.
Later, in December 2018, the Office of The National Broadcasting and Telecommunications Commission (NBTC) made a press release in relation to the acceleration of the modification of 700 MHz spectrum usage in the telecommunication business including compensations for persons affected by such modification of spectrum who are the operators of the digital television business.
Moreover, the sub-commission for the return of 700MHz spectrum made a press release to request the 700MHz spectrum back from the operators of the digital television business and to stipulate the compensation payment criteria for the operators of the digital television business. In this regard, SPC expects that the amount of compensation for the return of the 700MHz spectrum could be substantial and affect the decision to sell 90.1% of shares in SPTV.
The audit committee and the board of directors of NEWS are of the opinion, that due to an additional new fact occurred after the approval of the transaction, that SPTV may receive additional benefits from the return of 700MHz spectrum in a substantial amount, SPC should negotiate with TVD in relation to such additional benefits for NEWS’s interest.
In the event that SPC could not negotiate and agree with TVD in relation to such additional benefits for a mutually agreeable conclusion, the sale and purchase of 90.1% of shares in SPTV with TV should be ceased.
After the negotiation, both parties could not make a mutually agreeable conclusion on such additional benefits. Thus, SPC and TVD decided to cease the deal.
As for the future operation, SPC will continuously hold 100% of shares in SPTV and shall reorganize the business and management structure in relation to the television station for purpose of cost reduction of SPC and SPTV. In addition, SPC will follow up with the governmental agency’s actions in relation to the return of the 700MHz spectrum and the compensation payment for the operators of the NEWdigital television business.