SWG 50.0% 0.1¢ swish group limited (the)

video on demand

  1. 1,523 Posts.
    29 March 2004
    Australian Stock Exchange Limited
    Companies Announcements Office
    4th Floor
    20 Bridge Street
    SYDNEY NSW 2000
    The Directors of The Swish Group Limited (“Swish Group”) are delighted to announce that they have
    today reached agreement with their joint venture partner Xerts Hotel Technology Pty Ltd (“Xerts”), to
    acquire their shareholding in the SX Technology Pty Ltd (“SX Technology”) joint venture. SX
    Technology will now be 100% owned by Swish Group. As previously announced, SX Technology has
    developed a new, significantly more functional and cost effective, digital video on demand and high speed
    internet system for hotels, apartments and multi-unit developments (“Hotelinx System”).
    The consideration for the purchase is to be satisfied through the issue to Xerts of 6,000,000 fully paid
    ordinary shares in Swish Group, at a price of 10 cents per share. This is significantly above the weighted
    average closing price of Swish Group shares over the last 30 days of 4.7 cents. 50% of the shares to be
    issued are to be escrowed for 12 months and 50% for 24 months from the date of issue. The agreement
    also provides for Xerts to receive a royalty based on revenues earned by SX Technology from the
    Hotelinx System for 10 years and a percentage of the profits derived from business introduced by Xerts
    and their associated companies in the United Arab Emirates (“UAE”) and other countries in the Middle
    The opportunity for Swish Group to acquire the outstanding interest of Xerts in the joint venture has arisen
    as a result of the decision by the UAE based shareholders in Xerts to withdraw from all of their Australian
    investments, of which their interest in SX Technology is only one. The nature of the original joint venture
    agreement between Swish Group and Xerts enabled Swish Group to acquire the shares in SX
    Technology on extremely favourable terms. The Australian directors of Xerts will remain directors of SX
    Technology and continue to assist with the roll out of the business in Australia and internationally. Swish
    Group will appoint two further directors to the SX Technology board.
    The Hotelinx System enables a significantly greater number of movie choices by hotel guests (delivering
    150 to 200 movies or more on demand) and high speed internet access enabling guests to more easily
    connect their own PC or, alternatively, access the internet through the television screen in their hotel
    room. The Hotelinx System enables guests to pause, bookmark, fast forward or rewind their movie,
    which based on the Company’s experience (through the Hotelinx System operating at the Ramada Hotel
    in Melbourne), is likely to significantly increase hotel guest utilisation of the system. The inclusion of other
    features in the Hotelinx System including high speed internet access, the ability to provide information on,
    and access services available both within the hotel and in the city, in which the hotel is located, provide
    significant additional revenue opportunities for the Company.
    As announced on 19 March 2004, the Company has recently finalised an agreement to install the
    Hotelinx System in the 190 room Batman’s Hill hotel in Melbourne. The agreement, which is for a term of
    five years, provides for the Company to receive a majority of the movie and internet revenues received
    from guests who use the Hotelinx System.
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