THE STOCK Exchange has suspended the trading of shares in Multichoice (Cyprus) Public Company Ltd for the second day running after LTV was reported to have reached a deal with the board of CyTA to manage the miVision platform from 2006. The deal is said to be at a minimum fee of £2.5 million per year.
The co-operation agreement provides that subscriber channels LTV and ALFA remain on Multichoice’s platform until 2010, while at the same time LTV and Alfa will supply miVision, CyTA’s digital television platform, with entertainment content (movies, football, games etc.)
CyTA spokeswoman Sofia Yianacou confirmed that the reports were true but could not give any further details. She explained that, “only CyTA President Stavros Kremos knows the ins and outs of the deal”.
Kremos however, was unavailable for comment, as was LTV.
As well as paying LTV £2.5 million annually, it’s believed that CyTA will also pay a monthly bonus of £15 for every new subscriber that LTV brings in.
According to the Financial Mirror, the deal is expected to be ratified by the end of the month and concerns that it may be delayed or blocked by parliament, which needs to ratify every major deal of the government-owned telecom giant, were brushed aside by CyTA officials who said it was concluded by its subsidiary Digimed, that is semi-autonomous.
The Cyprus Stock Exchange on Tuesday announced that the trading of titles of Multichoice (Cyprus) Public Company Ltd was suspended following the company’s request in view of the recent report for the co-operation of Lumiere TV Public Ltd with CyTA, and “due to the uncertainty that might result in relation to the trading agreements of the company with LTV”.
On Monday, the Stock Exchange received three resignation letters from Messrs. Akis Avraamides, George Xinaris and Constantinos Emilianides. They submitted their resignations from the Lumiere Board of Directors with immediate effect.
According to Avraamides and Xinaris, their resignation “is related to the revaluation by Lumiere TV Public Company Limited of the expediency of its direct participation in Multichoice (and indirect participation via Multichoice Holdings (Cyprus) Ltd).”
The reason for Emilianides’ resignation is a possible conflict of interest, given that he is the legal advisor of Lumiere TV Public Co Ltd.
The CSE also received a letter from Lumiere TV Public Ltd according to which the company decided to dispose of the total 7,466,390 shares that they hold. Specifically, “the disposal of the shares above will be carried out pursuant to the CSE legislation.” Lumiere TV also said that the decision of LTV “is related to the revaluation of the expediency of the direct participation of LTV in Multichoice and its indirect participation in Multichoice via Multichoice Holdings (Cyprus) Ltd”.
Major TV stations such as Sigma and Ant1 are expected to protest to the Competition Commission and may even try to block the deal, claiming that the two main players in the pay-TV market are joining forces, which will bring a near 99 per cent control of the market
Minister of Communication and Works, Haris Thrasou spoke out on the deal, saying: “We’ve always had in mind the fact that CyTA would one day offer the use of their fibre-optic cables to others, and additional companies may also be involved in the future.”
He has asked for the framework of the agreement to be sent to him. “I will study it in detail before making the government’s position known,” he said.
Government spokesman George Lillikas echoed Thrasou’s sentiments, saying the agreement had to be looked into, and when asked whether it would be approved by the Cabinet he said: “CyTA is an autonomous organisation whose board of directors is independent, therefore the government doesn’t normally interfere in their decision-making.”
He noted that their overall policy should be in line with that of the government.
Established in 1993, LTV boasts around 65,000 subscribers, of whom 15,000 have upgraded to the NOVA digital platform. Executive Chairman Avraamides has said that LTV has a 30 per cent market penetration of all households in Cyprus, which is exceptional by international standards.
The key to the success is that LTV offers the right product mix, according to Avraamides, which includes Cyprus, Greek, UK and UEFA football combined with the latest film releases, and popular television series.
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