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EDCI Holdings, Inc. Message Board

  • smaycs4 smaycs4 Dec 1, 2011 11:34 AM Flag

    Sold Entertainment Distribution Company GmbH

    EDCI Holdings, Inc. Announces Sale of Entertainment Distribution Company GmbH
    Dec 01, 2011
    OTC Disclosure & News Service

    New York, NY -

    EDCI Holdings, Inc. Announces Sale of Entertainment Distribution Company GmbH
    NEW YORK, (Thursday), December 1, 2011 /OTC News & Disclosure Service/ -- EDCI Holdings, Inc. (PINK SHEETS: EDCI) (the “Company” or “EDCI”), today announced the following developments related to its majority investment in Entertainment Distribution Company, LLC (“EDC”).
    On November 30, 2011, EDC’s wholly owned subsidiary, Entertainment Distribution Company Netherlands Holdings B.V. (the “Seller”) signed and closed a Share Purchase Agreement (the “Agreement”) with Aegis GmbH (the “Purchaser”) for the sale and assignment of the Seller’s shares in Entertainment Distribution Company GmbH (“EDC GmbH”), a European provider of supply chain services to the optical disc market, to the Purchaser. Combined, the three Managing Directors of EDC GmbH have a controlling interest in the Purchaser.
    Pursuant to the Agreement, the Purchaser will pay to the Seller a total purchase price of $15.0 million, $8.85 million which was paid at closing and $6.15 million to be paid no later than December 31, 2012 and no earlier than June 30, 2012. The second installment shall accrue interest at a rate of 5% from the closing of the agreement until the actual payment date. The second installment is also secured by a pledge of certain assets of the Purchaser.
    The Agreement provides for a six month indemnity period, in an amount not to exceed the purchase price received. However, the indemnity is limited and only covers representations and warranties related to the Seller’s ownership of, and ability to sell, the shares.
    As a result of the sale, EDC and its subsidiaries are no longer engaged in the manufacture and distribution of compact discs (CDs).


    Prior to making any additional distributions to its shareholders, EDC and EDCI will evaluate any potential reserves related to this agreement and other potential reserves at EDC, and expects to provide an update as to the plan for any future distributions in early 2012.

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    • Part of the picture:


      EDC U.S. Operation

      There was no restricted cash relating to EDC’s U.S. operation at December 31, 2009. As part of the Sony Sale, EDC’s Senior Secured Credit Facility was amended to include provisions which required a portion of the proceeds from the Sony Sale to be held in escrow in the name of the administrative agent for use in the wind-down of certain U.S. operations or prepayment of loans under the terms of the Seventh Amendment to the credit agreement. During 2009, EDC used the $5.4 million of proceeds in conjunction with wind down costs associated with the EDC U.S. operations and to pay off debt.


      The Sony sale was for $26 million.

    • Yeah, it is tough to keep the structure straight. I wonder how investors can justify selling. I think the odds dictate that any distribution will be greater than $5 (unless Kings Mtn is written down to $0 and donated to a nature conservancy). If EDC still holds (after sale of EDC GmbH) a good portion of the cash from the sale of the US sub then the final distribution could be much higher. Until there is some clarity the only thing I am comfortable with is the final proceeds being north of $5.

    • Yeah sorry - my mistake. :)

      Thanks for replying, it seems we're on the same page. I just wonder how people can justify buying here without knowing what assets left / liabilities remain...

    • EDC sold EDC GmbH not EDCI.

    • EDC's King Mnt not EDCI's.

    • But EDCI just sold their German sub. which (to my and BCI's understanding)does not include everything under the EDC column. For example, the assets held for sale includes EDCI's King's Mountain facility (see pg 10 footnote 9).

      Unfortunately, I don't know how we can tell exactly what assets/liabilities will transfer with the German sub and which will not. Thoughts anyone?

    • They sold EDC GmbH, not EDC. EDC USA assets sold for 26 million and the Kings Mnt property is still held by EDC. I am not sure of the disposition of the cash or how much of the EDC assets are allocated to EDC GmbH. Once the split is known, then we will have the info needed. The remaining distributions are likely to total more than $5.

    • I spoke too soon: 5.9 million after all. I wonder why 5.5 are listed as outstanding?

      In total, approximately $2.75 million was used to pay the cash out
      consideration in the Stock Split Transaction. Upon the effectuation of the split transaction, EDCI had approximately 5,929,153 million shares of common stock outstanding among approximately 175 beneficial shareholders in street
      name and approximately 9 record holders.

    • quarterly report here: http://www.otcmarkets.com/financialReportViewer?symbol=EDCI&id=63444

      Page 8 breaks out EDC from the consolidated balance sheet. It shows the 21 million NAinLiq split up between 9.9 million in EDC and 11.1 in EDCI.

      They make about 5 million more on recent sale of EDC.

      Not sure why Kings Mtn would be added to 26 million though.

    • First the answer I am pretty sure about:


      Issued shares = 6 million, but outstanding = 5.5 million

      Share Structure
      Market Value1 $23,657,320 a/o Nov 30, 2011
      Shares Outstanding 5,929,153 a/o Sep 30, 2011
      Float 5,531,626 a/o Sep 30, 2011

      They did that revers split where they cashed out shareholders with less than 1400 shares. I assume they bought about 500k shares at that time.

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EDCI
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