AME invests in the new commercial radio market

Investment

Africa Media Entertainment Ltd is delighted to announce its acquisition of a 24.9% stake in the new commercial radio market of Mpumalanga. The AME led consortium of M-Power Radio comprises local Mpumalanga business and interest groups known as Mbombela JV: 48%, Direng Investment Holdings headed by Kenny Setzin: 27.1% and AME: 24.9%.

There were two other consortiums in the race which began as far back as April 2005 when ICASA issued invitations to apply for the licence, however, the regulator felt that M-Power Radio presented the best application.

While the process to award the licence took almost two years, the real work has just begun - delivering on a promise to the people of Mpumalanga is the key driver in making M-Power Radio a trusted and successful brand on the radio dial. The M - Power team headed by Frank Schultze and comprising a crack team with a proven track record in Radio, includes specialists in the areas of Programming, News, Technology, Marketing, Human resources and Airtime Sales.

In its reasons for granting the licence to M-Power Radio, ICASA concluded that the consortium had conducted satisfactory research to underpin its proposed format; that AME's capability, expertise and experience in commercial radio would be of great benefit to the consortium; that the financial statements in the business plan were realistic in nature; that the business record of M-Power Radio and its shareholders was satisfactory and that it was satisfied with M-Power's empowerment credentials of a 52% black and 30.8% female ownership.

Three other licenses were available in the territories of the Northern Cape, North West province and Limpopo province. Whilst nobody applied for a licence in the Northern Cape, the provinces of North West and Limpopo were hotly contested.

The great news for AME's shareholders is that in addition to the 24.9% acquisition in M-Power Radio, AME has concluded a further three agreements across two of the new licence holders, which will bring additional revenue to the listed business.

The additional agreements comprise a consultancy agreement with M-Power Radio to provide the skills required in the initial period of the licence and help establish the radio station in Mpumalanga, and two contracts for United Stations to represent two of the three new radio brands in South Africa. United Stations, the AME owned Specialist Media Sales House currently representing Algoa FM, OFM, Money Web and Planet Fitness Radio; has secured contracts to represent both M-Power Radio and Radio North West, the new licence holder in North West Province.