prts next move, page-6

Hopefully some clarity after today's board meeting.

Article from this morning's Age (note the mention of a convertible bond, which would give Prime 48%):


destra returning a Prime position
April 22, 2008

PRIME Media Group's majority stake in digital media company destra has soared after a tepid shareholder response to a $15 million rights issue.

The regional television broadcaster's decision to underwrite the share issue saw it purchase 97.6% of the 150.5 million destra shares on offer — about $14.7 million of destra's overall proceeds. That lifts Prime's 19.6% stake to 44%.

While Prime's new stake is well above the usual 20% ownership trigger, at which investors are compelled to make a formal takeover offer, the company does not expect to have to make a bid.

Prime chief executive Warwick Syphers was unavailable for comment, but it is believed the company sought legal advice before the rights offer, which suggested Prime would be exempt from that aspect of takeovers law, because the shares had been acquired in the rights issue rather than on market.

When destra last month announced the offer of five new shares for every 11 shares investors held, its shares were trading at 11¢ — a 1¢ premium to the offer, but since the shares were released from the pre-rights trading halt, they have closed below the 10¢ offer price every day.

During the period, destra revealed it had been stung by the collapse of Opes Prime, the broker that financed its 10% stake in its former takeover target Beyond International.

Opes' plunge into administration resulted in destra's entire Beyond shareholding being seized by the broker's main creditor, ANZ, effectively costing the company $900,000.

destra chief executive Domenic Carosa and director Paul Choiselat also lost most of their shares in the company because they had invested with Opes, which prompted Mr Choiselat to quit destra's board last week.

As well as underwriting the rights issue, Prime also paid destra $3.5 million for a convertible bond at an annual interest rate of 11%.

Prime can convert this bond to destra shares at any time at 10¢ a share. If converted after a year, it would lift Prime's destra stake from 44% to 48.1%.

destra shares yesterday closed 0.1¢ lower at 9.5¢, while Prime's fell 1¢ to $3.24.

Investors may discover more about the implications of the capital raising, and Prime's increased stake, after a destra board meeting today.