Capital Alliance (CPT)

[Ed Monton]

Capital Alliance revamps Sun Media deal


2005-07-21 14:16 ET - News Release

Mr. James Neil reports

CAPITAL ALLIANCE GROUP INC.: SE GLOBAL & SUN MEDIA TO PROCEED WITH NEW TRANSACTION

Capital Alliance Group Inc. unit SE Global Equities Corp. (SEG) has created a new transaction with China-based Sun Media Investment Holdings Ltd. (SMIH).

Due to the nature of the original transaction and the extensive time and due diligence required, both SEG and SMIH have agreed to put the original transaction on hold (see Stockwatch news dated Jan. 7, 2005). SEG has agreed to acquire a newly formed subsidiary company of Sun Media called Sun New Media Group Ltd. (SNMG). SNMG holds the program distribution and licensing rights to all the programs produced and owned by SMIH and certain subsidiaries. The program distribution rights include a number of highly popular television programs aired in China such as Yang Lan One on One, C'est La Vie Daily, 66 Places of a Lifetime, and Olympic & Me, among others. SNMG also owns other distribution rights in digital and electronic publishing format using the Internet and mobile phones as delivery channels.

According to the share-exchange agreement, SEG will undergo a 1:2 reverse split and issue 55 million postconsolidated shares to SMIH and parties in exchange for 100-per-cent ownership of SNMG. SMIH will guarantee a profit of no less than $3-million (U.S.) within the following fiscal year after the closing of this transaction. Any shortfall on the net income will be assumed and compensated by SMIH. A pro forma income statement and balance sheet will be incorporated into a new submission of Form 14A and Form 8-K, to be filed with the Securities and Exchange Commission (SEC). An EGM will be held for a proxy vote after which both parties will proceed with the final closing of the transaction.

"Our companies are now able to proceed with this transaction in a much more efficient and timely manner given the nature and value of the assets of Sun New Media Group Ltd. We believe this is the first step in an exciting new direction for SE Global and its stockholders," commented Toby Chu, chairman and chief executive officer of SE Global Equities Corp.

"We look forward to completing this initial transaction and commencing with our merger and acquisition plans in China and North America immediately following the merger," commented Dr. Bruno Wu, executive chairman of Sun Media Investment Holdings Ltd.

The final closing of this transaction will be subject to receipt of all regulatory approvals that may be required.