Corporate shakeups continue at Salter Street Films’ new media subsidiary

Salter Street Films Ltd appears to have shelved plans to publicly trade its new media division - at least for the time being. Following several quarters of disappointing financial results and last November's collapse of a reverse takeover deal (CNM, December 23/99), the Halifax-based production house has decided to up its ownership in Salter New Media Ltd (SNM) from 38.7 per cent to 98 per cent. The company also announced May 18 that it was spinning off a new company (1391408 Ontario Inc) that will use auction technology from SNM's Bargoon.com web site to develop a new business-to-business application. Salter subsidiary catersto financial communityQ1234.com, an online webcast service of Salter New Media, has opted to allow 100 free streams to its conference call customers. The company offers webcasts including both audio and video of quarterly earnings conference calls and other important announcements for the investment community. Q1234 launched in April 1999, and has since hosted over 200 webcasts, over half of which have been broadcast since January this year. For the moment, the organization is offering the streaming for free in the hopes of attracting big-name companies to the technology. The is no word on when the company will begin charging organizations for the service. Upcoming events include announcements for the Royal Bank of Canada, Mosaic Group, Com Dev International Ltd and for parent Salter Street Films."Bringing Salter New Media's assets back into Salter Street Films allows us to focus on the webcasting properties, Q1234.com and InvestorCanada.com, that have both demonstrated promise in the marketplace, and to develop other content sites," Salter Street president/COO Catherine Tait said in a release. "With respect to the properties we have developed that fall outside of Salter Street's core content business, it is our intention, under the direction of Sudhir Morar, general manager of Salter New Media, to accelerate the rollout of a new B2B plan that leverages the Bargoon.com auction engine." Salter is revealing little about the new company at this point, and company representatives hadn't returned phone calls by the deadline for this edition. A May 9 circular to investors said the numbered company "will establish a website to function as a marketplace facilitating communications and business transactions between buyers and sellers of branded consumer packaged goods." The ownership restructuring also sees Aliant Holdings Inc dropping its equity participation in SNM. The telco holding company had an option to divest its 27 per cent stake in SNM if it did not become a publicly traded company by May 2001. Aliant's representative on SNM's board, Dennis Connor, says that schedule was advanced as part of a broader plan to make the company more competitive. "We needed to put more muscle behind Salter New Media and perhaps a more focused way of doing that is back in the parent, Salter Street Films," says Connor, VP of acquisitions and investments for Aliant Horizons, the holding company for the Maritime telephone companies. "We (also) felt it would increase our liquidity in the investment, and we think that Salter Street Films is at a particularly attractive level of market value at the moment." Aliant's departure from SNM won't sever its corporate relationship with Salter Street Films. Aliant, which was already a minority shareholder in Salter Street, will receive additional shares in the production company, as well as equity in the new entity, in return for its equity in SNM. Connor says the share exchange will boost its ownership position in Salter Street Films to between 12 to 13 per cent. The same share offer was made to SNM's institutional investors. As of March 31, Salter New Media had net assets of over $3.6 million, including about $3 million in cash. Like many Internet start-ups these days, SNM has struggled since its inception in 1998 to find a niche that complements its core operations, and can function as a financially independent company. Late last year it decided to scale back its web properties from five to three, dropping its more entertainment-oriented sites - its daily satirical web site, 22Online.com, and its hip-hop music magazine, Triplebypass.com. Last fall also saw the departure of some key executive staff, including its CEO. About that same time, plans to go public on the CDNX were shelved after reverse takeover talks broke down between SNM and Berwind Capital Corp. Salter Street executives have kept a low profile in the wake of that failure, and have not been available for media interviews. SNM's fortunes are now tied to the B2B market through its remaining web sites - Bargoon.com, Q1234.com and InvestorCanada.com. Q1234.com offers webcasts of quarterly earnings conference calls and other industry announcements and events. InvestorCanada.com offers an online audio magazine for investors. Salter Street Films stock has recently performed well in the aftermath of a deal struck between Q1234.com and the Toronto Stock Exchange which sees the exchange promoting Q1234's webcasting service to TSE-listed issuers. Since its launch in 1998, the webcaster has broadcast over 200 corporate events for companies such as Alcan Aluminum Ltd, Suncor Energy Inc and Noranda Inc. SNM likely hasn't closed the door entirely on developing entertainment content for the web. Its parent company recently applied for dozens of new digital specialty television licenses covering a gamut of topics from nature to new age. With a significant online component expected to be a part of the winning applications, it's likely that Salter executives are evaluating their strategy to marry new media and broadcast content.

Corporate shakeups continue at Salter Street Films’ new media subsidiary

News | 05/31/2000 4:00 am EDT

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