UK DVD and video distributor Metrodome Group is set to boost its international, presence in the home entertainment sector following plans by Germany's TV-Loonland to acquire a 29.9% stake.
Subject to receiving approval at an extraordinary general meeting on November 29, TV-Loonland will buy 4,184,250 new shares from Metrodome at a price of 17 pence per share as part of a capital increase and will also extend a $2.2m (£1.5m) loan facility to the UK company for the purpose of buying new film and DVD/video rights.
"The investment by TV-Loonland opens new opportunities for Metrodome and permits the increased expansion of our core DVD and video business which has always been profitable", declared Howard Mighell, managing director at Metrodome, while TV-Loonland's President and CEO Peter Voelkle pointed out that "the strategic stake in Metrodome will strengthen our new home entertainment business segment". At the same time, Metrodome will benefit from TV-Loonland's extensive rights catalogue - especially in the area of entertainment for children and teenagers - and from the broad international presence of the TV-Loonland Group.
Following TV-Loonland's strategic investment, Bruce Fireman, former managing director of Inestec Henderson Crosthwaite Corporate Finance, will be named as chairman at Metrodome, with TV-Loonland's Dr. Markus Schaefer and Frank Preuss joining the management board.
After the first six months of the current 2001/2002 financial year, Metrodome is expecting pre-tax losses of more than $2.9m (£2m) due to necessary write-offs on film rights, goodwill and investments into its music arm DTK-Metrodome, but anticipates earning most of that back in the second half of the year.
This latest plan for a strategic investment in the Metrodome Group comes just a week after TV-Loonland announced that it would be gathering all of its home entertainment activities in a new London-based subsidiary TVL-HomeEntertainment Ltd. which would be responsible for the marketing of its 4,000-title library of rights in this rapidly growing business sector.
This new company also holds TV-Loonland's 69.3% stake in SRE Corporation, South Korea's leading independent video and DVD distributor and the operator of the leading video-on-demand portal in Korea.