Statement re Investment

RNS Number : 0809N

TMT Investments PLC

26 August 2011

 



26 August 2011

TMT INVESTMENTS PLC

("TMT" or the "Company")

Investment in Berryman Capital Group Ltd

The Board of TMT is pleased to announce an investment in Berryman Capital Group Ltd ("BCG"), a developer of online games for social networks.  

BCG is a limited liability company incorporated and registered under the laws of the British Virgin Islands.  Its fully controlled subsidiary, Creat Studio Ltd ("Creat Studio"), is a limited liability company registered under the laws of the Russian Federation, which was established in August 2010 by a team of Russian professionals with significant international gaming industry experience. 

To date, BCG has launched a number of online games, such as "Never Sky", "Unsung Heroes" and "Maze", which are currently distributed via Facebook, vkontakte, StudiVZ, Nasza-klasa and other social network platforms.

TMT has agreed to acquire new shares representing 20% of BCG's equity capital (post-transaction) for an aggregate consideration of $1,000,000.  A definitive agreement for the transaction was entered into today.  Completion of the acquisition is conditional on undertakings given by BCG and its existing shareholders being satisfied.  On satisfaction of those conditions, expected in September 2011 ("the Effective Date"), the transaction is expected to be completed in two stages, when TMT delivers to BCG the amounts of $500,000 and $500,000 within ten and sixty business days of the Effective Date respectively.

The agreement between the parties includes pre-emption rights in favour of the Company and other shareholders in the event of a proposed sale of shares by any shareholder other than the Company, and a right on the part of shareholders to participate in any sale of shares where the Company does not exercise its pre-emption right.  The Company is not, however, required to make a pre-emptive offer of its shares in BCG to the other shareholders if it proposes to sell them.  The agreement also gives the Company a right of veto in order to protect its position in certain circumstances.  Pursuant to its rights under the agreement, TMT has appointed Alexander Pak to the Board of BCG.

In respect of the year ended 31 December 2010, BCG's unaudited loss before taxation amounted to $849,706, and unaudited net assets as at that date amounted to $663,566.

TMT believes that its investment will help Creat Studio to boost its presence on the rapidly growing social games market.  In particular, BCG intends to use the investment proceeds to develop new games and expand the number of distribution channels, which, in addition to Russian and international online social networks, will also include mobile platforms such as iOS and Android.

26 August 2011

For further information contact:

TMT INVESTMENTS PLC Mr. Alexander Selegenev www.tmtinvestments.com	[phone] [e-mail]
ZAI Corporate Finance Ltd NOMAD and Broker Marc Cramsie/Irina Lomova	020 7060 2220

About TMT Investments

The Investment Policy & Strategy

The Company's objective is to generate an attractive rate of return for Shareholders, predominantly through capital appreciation, by taking advantage of opportunities to invest in the TMT Sector. The Company aims to provide equity and equity-related investment capital, such as convertible loans, to private companies which are seeking capital for growth and development, consolidation or acquisition, or as a pre-IPO financing.

In addition, the Company intends to invest in publicly traded equities which have securities listed on a stock exchange or over-the-counter market. These investments may be in combination with additional debt or equity-related financing, and in appropriate circumstances in collaboration with other value added financial and/or strategic investors.

The Company is not geographically restricted in terms of where it will consider making investments. It will consider any geographical area, to the extent that the investment fits within the Company's investment criteria. The Directors and Consultants have expertise in emerging markets and, in particular, in Russia and the Commonwealth of Independent States. The Company will not be subject to any borrowing or leveraging limits.

Private Companies

The Company will target small and mid-sized companies and will seek to secure at least blocking stakes and board representation, where it considers that the Company and/or an investee company would benefit from such an appointment. The Company will consider making equity investments in lower than blocking stakes only where it sees ways to increase the stakes to blocking or controlling stakes at a later date. Each investment is expected to be at least US$250,000.

The investments targeted by the Company will aim to support rapidly-growing private companies to increase market share and achieve long-term shareholder value. It is envisaged that if the Company invested in a private company prior to that company listing on a stock market, the Company would retain a part of its investment in the listed entity going forward. The Company intends to work closely with the management of each investee company to create value by focusing on driving growth through revenue creation, margin enhancement and extracting cost efficiencies, as well as implementing appropriate capital structures to enhance returns.

Public Companies

When investing in public equities, the Company will seek to select companies with a dominant market share or strong growth potential in their respective segments. No restrictions will be placed on the size of public companies in which the Company may make an investment. The Directors intend to make investments in companies or businesses with attractive valuation, growth potential, with competent and motivated management, which enjoy brand recognition, have scalable business models, have strong relationships with customers and have in place transparent accounting policies.

Realisation of Returns

The Directors will, when appropriate, consider how best to realise value for Shareholders whether through a trade sale, flotation or secondary refinancing of the investee companies. The proposed exit route will form a key consideration of the initial investment analysis.

The Company expects to derive returns on investments principally through long-term capital gains and/or the payment of dividends by investees. The primary ways in which the Company expects to realise these returns include: (a) the sale or merger of a company; (b) the sale of securities of a company by means of public or private offerings; and (c) the disposal of public equity investments through the stock exchanges on which they are listed.

For private investee companies the Company believes that its typical investment holding period should provide sufficient time for investee companies to adequately benefit from the capital and operational improvements resulting from the Company's investment. The targeted holding period shall be reviewed on a regular basis by the Company, but it is expected that this will typically be between two to four years. For public equities the Company's objective is to maximise capital appreciation. Following the acquisition, the Company will continue to conduct extensive research and monitoring of the investment. Importance will be placed on the timing of any disposal which will follow a thorough review of market conditions and those reports and sources that are available to investors. Should the Company consider that the capital appreciation of a particular public equity investment has reached its peak or is likely to or has begun to decline, then the Company will consider the sale of that investment.

 

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