Ad agency plans $75m bond for new magazine launches

PUBLISHED : Thursday, 27 April, 2006, 12:00am
UPDATED : Thursday, 27 April, 2006, 12:00am

SEEC Media, a mainland print media advertising company, yesterday announced plans to raise $75 million by issuing convertible bonds and warrants to Templeton Fund to finance future acquisitions and launch new titles.

Shares in the company rose 5.41 per cent and closed at $0.39 yesterday. The shares were suspended pending the announcement.

SEEC Media is the advertising agency for six mainland publications including business news weekly Caijing Magazine, Securities Market Weekly and Successful Marketing.

'The advertising market in China is more robust than ever, with a growing consumer demand and upcoming events such as the Beijing 2008 Olympics. SEEC is positioned to benefit from the ongoing relaxation of the China media industry,' said Mark Mobius, head of Templeton's emerging markets investment teams.

SEEC Media aims to issue US$10 million of 2 per cent convertible bonds due in 2011.

The conversion price and the exercise price for the bond and warrant is 42.2 cents, or 90 per cent of the volume-weighted share price at the date of the conversion or exercise.

Templeton will hold a 12.35 per cent stake in the company if it fully converts the bonds into shares between 2008 and 2011. The warrant issue represents 4.3 per cent of the company stake.

Last month the company secured a deal with United States-based publisher Time Inc to launch the China edition of Time's Sports Illustrated magazine.

Sport Illustrated China is expected to launch by the end of this year as a bi-weekly. The new title will have a team of writers, editors and designers based in Beijing and aims eventually to become a weekly.

The new magazine will focus primarily on coverage of Chinese and American basketball, football and other 2008 Summer Games-related sports.

'The launch of the new title should help the company to expand its advertising revenue stream and reduce its reliance on finance-related clients,' Bertrand Chui, analyst at ICEA, said.

Net profit at the company was $39 million on revenue of $101 million for the year ending in December last year.