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Shareholders, which included the preferential shareholder the Development Bank of Southern Africa, the National Empowerment Fund and the Industrial Development Corperation, voted overwhelmingly for the rescue plan which involved StarTimes paying out creditors and restructuring the company.
It is estimated that TopTV owed about R1.4-billion to creditors and shareholders, which also included Disney and Warner, as well as Fox International.
StarTimes has operations in 16 African countries and existing infrastructure and licencing deals, as well as 7-million pay-TV subscribers in China. It is highly regarded in the industry, according to Business Rescue Practitioner Peter van den Steen.
StarTimes is unable to own more than 20% because of controls in terms of the Electronic Communications Act.
Shareholders and creditors delayed proceedings to discuss two late expressions of interest of a consortium led by black owned media group MSG Afrika and Malose Keka of Falk Trading calling themselves Dynamic TV, and that of Kenya pay-TV operator the Wanachi Group.
What interested creditors was that Dynamic TV had a soft, unconditional loan from Multichoice of R500-million, over R300-million of which was to be put into reviving TopTV. Creditors were also to be paid 20c to the rand, rather than the StarTimes 10c to the rand offer.
In the end they opted for StarTimes which had placed a firm offer on the table based on a due diligence it had completed.
The Business Rescue plan said TopTV was unable to cope with the high cost of content, among other things, and was losing subscribers because of signal problems and the loss of key channels.
The offer by StarTimes was to expire Tuesday night, April 30, and the company had made it clear that they would walk away from the deal if shareholders and creditors voted against the rescue plan as it presently stood.
Van den Steen, said without Business Rescue the company would have to be liquidated.
Only the Development Bank of South Africa would then have been paid out, as it was the preferential creditor.
But the Development Bank would only have received a portion of the money it was owed as the company did not have sufficient funds to pay out.