Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


Dotcom's Baboom eyes up to A$8.5 mln of new capital in 2014

Dotcom's Baboom eyes up to A$8.5 mln of new capital this year

By Paul McBeth

July 16 (BusinessDesk) - Baboom, the online music service part-owned by flamboyant internet entrepreneur Kim Dotcom, will look to raise up to A$8.5 million this year as it funds a full product launch in the coming six months.

The company is seeking A$4.5 million from professional investors, selling shares at 40 Australian cents apiece and valuing the business at A$39.5 million, according to an offer document published on Baboom's website. That would be followed by an initial public offer in which Baboom would raise between A$3 million and A$4 million, pending due diligence and the firm's capital needs, with a view to list by mid to late November on the ASX, Ben Yeo of Novus Capital, the offer's financial adviser, lead manager and sponsoring broker told BusinessDesk.

The initial A$4.5 million outlay would be spent on buying a 20 percent stake in the ONEall social network login platform, developing its mobile platform, integrating backend systems and buying and licensing music.

"By the time the offer closes I envisage the company to be in a strong position to develop its backend systems, mobile platform and content acquisition prior to the platforms hard launch either late December 2014 or January 2015," Yeo said in an email.

Baboom is looking to woo musicians and licence holders by offering them up to 90 percent of revenue generated by the platform through downloads, subscriptions, merchandising and ticketing, essentially supplanting the traditional network of agencies.

The pre-IPO capital raising closes on Aug. 18, after being extended for a week to allow chief executive Grant Edmundson to meet several potential investors in Australia, and has attracted interest from investors in Australia, New Zealand, Europe and Asia, Yeo said.

Baboom is 45 percent owned by interests associated with Dotcom via Coatsville Trustee Services, 45 percent by Michael Sorensen's Vig Ltd, which also holds an 11 percent stake in Mega, and 10 percent by executive director Xavier Buck, who also leads product development.

The offer is touted as a speculative investment involving significant risks, citing Dotcom's Megaupload as a potential hurdle to attract music suppliers given its alleged copyright infringement and digital music service business models as challenges.

Still, the company sees a tie-up with Dotcom's Mega file-storage business as providing a potential 8.4 million plus users and using a so-called Megakey to let users to build up credits by watch online ads, which can then be used to download music. Customers would also get up to 50 gigabytes of storage for music they’ve purchased.

Baboom would only have an exclusive licence on such a deal for between one and three years, according to the offer document.

The upcoming Baboom float coincides with Mega's plans to list on the NZX via shell company TRS Investments, in a deal valuing the file-sharing company at $210 million. Mega is in the process of raising US$7 million ahead of the reverse listing.

Auckland-based Dotcom staged a launch for Mega in early 2013 to replace Megaupload, his previous venture which was shut down in a US-led operation that alleged the file-sharing firm and its owners had committed mass copyright infringement and money laundering of more than US$500 million. He and co-accused Finn Batato, Mathias Ortmann and Bram van der Kolk are fighting extradition to the US where they faces the charges.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Post-Post: Brian Roche To Step Down As NZ Post CEO

Brian Roche will step down as chief executive of New Zealand Post in April 2017, having led the state-owned postal service's drive to adjust to shrinking mail volumes with a combination of cost cuts, asset sales, modernisation and expansion of new businesses. More>>

ALSO:

Company Results: Air NZ Rides The Tourism Boom With Record Full-Year Earnings

Air New Zealand has ridden the tourism boom and staved off increased competition to deliver the best full-year earnings in its 76-year history. More>>

ALSO:

New PGP: Sheep Milk Industry Gets $12.6M Crown Funding

The Sheep - Horizon Three programme aims to develop "a market driven, end-to-end value chain generating annual revenues of between $200 million and $700 million by 2030," according to a joint statement. More>>

ALSO:

Half Full: Fonterra Raises Forecast Milk Price

Fonterra Co-operative Group Limited today increased its 2016/17 forecast Farmgate Milk Price by 50 cents to $4.75 per kgMS. When combined with the forecast earnings per share range for the 2017 financial year of 50 to 60 cents, the total payout available to farmers in the current season is forecast to be $5.25 to $5.35 before retentions. More>>

ALSO:

Keep Digging: Seabed Ironsands Miner TransTasman Tries Again

The first company to attempt to gain a resource consent to mine ironsands from the ocean floor in New Zealand's Exclusive Economic Zone has lodged a new application containing fresh scientific and other evidence it hopes will persuade regulators after their initial application was turned down in 2014. More>>

Wool Pulled: Duvets Sold As ‘Premium Alpaca’ Mostly Sheep’s Wool

Rotorua business Budge Collection Limited (Budge) and sole director, Sun Dong Kim, were convicted and fined a total of $71,250 in Auckland District Court after each pleading guilty to four charges of misrepresenting how much alpaca fibre was in their duvets. More>>

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news