Kids producer and distributor TV Loonland has warned it cannot continue its current level of operations unless a recapitalisation plan is approved by shareholders at an extraordinary general meeting next week.
The German-based company narrowly missed achieving the 75% shareholder approval needed to implement the same plan at this time last year and outgoing CEO Simon Flamank warned that without approval this time the company could “enter a downward spiral which may only be stopped by the positive intervention of a third party.”
In 2008 the company shed assets including its share holding in Metrodome and the Hasbro Classic Library, which it is now distributing on Hasbro’s behalf. The proceeds of those sales were used to pay down debt. Loonland also slashed the headcount at its German office by half last year.
Now it is seeking approval for a share consolidation, which would in turn allow a fresh round of equity fund-raising.
Loonland said it has fielded interest from companies that would like to acquire certain Loonland assets, form partnerships or acquire the company outright – for below its current market capitalisation of €2 million. However, Flamank said that none of these negotiations has yet lead to a proposal that could be put before shareholders.
The company said that the existing convertible bondholders have signalled their willingness to extend terms on a €2 million bond due for repayment this month. It will report half-year unaudited results next week. Its unaudited results for 2008 show Loonland recorded a 2008 pre-tax profit of €2.8 million compared with a loss of € 2.6 million a year earlier.
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