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Cinedigm Gets $30 Million Chinese Lifeline, Owner

29 Jun, 2017 By: Erik Gruenwedel

Cinedigm June 29 announced a $30 million investment from Bison Entertainment Investment Limited, a Chinese-based media and entertainment unit of Bison Capital.

Under the deal, Cinedigm has agreed to sell Bison Capital 20 million shares of Class A common stock, from which up to 400,000 shares may be sold to Cinedigm’s management. Bison Capital’s share purchase makes it the majority shareholder, which includes two seats on Cinedigm’s seven-member board.

Bison Capital will also provide a $10 million loan for working capital and general corporate purposes within 60-days of closing. It will work with Cinedigm to refinance and/or retire all outstanding debt.

“I want to reiterate that we believe this agreement with Bison Capital is a major positive and transformational event for the company,” CEO Chris McGurk said on the fiscal call. “We believe the strategic upsides for the company will be enormous.”

Cinedigm plans to hold a separate call to discuss the investment, which is expected to help the indie home entertainment distributor broaden its OTT video and digital cinema projection businesses in China.

Meanwhile, Cinedigm’s entertainment unit saw success with a variety of packaged-media titles, including NFL Super Bowl LI Champions,” “Power Rangers” library titles and Beauty and the Beast and Other Princess Tales. On the digital front, Good Witch: Season 3 sales were 211% higher than Season 2. When Calls the Heart: Season 4 also performed well. Content and entertainment revenue topped $7.9 million.

Over-the-top video channels Dove Channel, Docurama and CONtv continued to gain app downloads, registered users and active subscribers. The three channels currently have approximately 4 million app downloads, 797,000 registered users and approximately 85,000 active subscribers.

“We now plan on expanding our businesses internationally, closing key new distribution deals to rapidly grow our OTT channels and leveraging our OTT capabilities to launch new owned and third party channels while providing important business and content services to the entire high growth OTT ecosystem,” McGurk said.

Finally, Cinedigm saw its fourth-quarter (ended March 31) net loss increase to $9.6 million, from $6.1 million during the previous-year period. Consolidated revenue reached $19.6 million.

About the Author: Erik Gruenwedel

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