Capital Alliance (CPT)

[Ed Monton]

Not exactly sure if this is good news or not:

Capital Alliance to vend into Sun Media assets

2005-01-07 11:30 ET - News Release


Mr. Toby Chu reports

CAPITAL ALLIANCE GROUP SUBSIDIARY ANNOUNCES PROPOSED ASSET ACQUISITION

Capital Alliance Group Inc. subsidiary, SE Global Equities Corp., has signed an engagement term sheet with Sun Media Investment Holdings Ltd., headquartered in Shanghai, China, for the vend-in of assets into SEG among other business.

According to Sun Media, the selected assets to be vended in represent a current valuation of approximately $320-million (U.S.), which will be supported by an independent business valuator's report. Under the terms and conditions of the engagement term sheet, SE Global Equities will issue approximately 320 million shares to Sun Media and other related parties involved in this transaction. In addition, Capital Alliance, the parent company of SEG, has agreed to sell 500,000 shares to Sun Media at 90 U.S. cents per share. CAG will retain a total of 14 million shares in SEG. Sun Media is to pay CAG a cash deposit of $150,000 (U.S.) to secure this share transaction on signing this agreement.

The parties will enter into a formal asset acquisition agreement with a closing date scheduled for March, 2005, or earlier. Also, as set forth in the engagement term sheet, SEG will undergo a 1:2 share consolidation prior to the closure of this transaction.

Upon completion of this transaction, the parties have agreed that SEG will enter into a management contract with CAG for two years in exchange for 250,000 postconsolidated shares as compensation. CAG and Sun Media will then enter into a pooling agreement on the closing of the transaction. The parties have also agreed that CAG will be granted an option to buy back SEG's existing investment business within two years of the closing this transaction.

The transaction will be subject to a formal due diligence review, the negotiation and entering into all necessary agreements, approval by SEG shareholders and its board of directors as well as receipt of all regulatory approvals which may be required.

About Sun Media

Sun Media is an investment group focusing on growth opportunities in media markets in Asia, particularly Greater China. Sun works to add value by creating and sustaining branded content platforms, which it can leverage across many different forms of media. Today, Sun Media has activities in six strategic areas: television, news media, publishing, education, advertising and sports. In all, Sun Media has direct interests in 11 media companies, through which it holds shares in more than 30 media operations, controlling no less than 60 media brands in nine countries and 15 cities.