YooMedia, the indebted interactive television group, plans to merge with Fresh Interactive Technologies in Spain and rebrand as Mirada, which means look or view. The loss-making listed British group hopes to receive Spanish backing in what has been described as a survival strategy to become an international interactive company.
Established in 2000, Fresh IT is a privately-held provider of interactive television products and services to the Spanish market.
In a complex restructuring deal, YooMedia will acquire the majority of the Spanish company, with Spanish investors Kasei and Baring contributing a total planned investment of nearly £13 million. These funds will be used to strengthen the balance sheet, provide working capital and settle debts with two of its backers, to whom it owes over £5 million.
José-Luis Vazquez, the head of Fresh IT, will become chief executive of the new company. Neil MacDonald, the managing director of YooMedia, will become chief operating officer, with current chairman Michael Sinclair remaining in that role.
YooMedia plc trades on the Alternative Investment Market in London, with shares slumping to a new low at a fraction of a penny. In the first half of the year it lost £3.6 million, down from a loss of £4.9 million for the same period the previous year.
YooMedia is also proposing to dispose of its unprofitable dating division, which trades as Dateline.
In a statement, YooMedia said it was still seeing reduced demand in the interactive broadcast sector. In recommending the proposals, the directors said they provided the best option for satisfying outstanding creditors. They warned that if the shareholders did not support the proposals the company may not have sufficient working capital to meet its obligations to creditors.