Singapore : TechMedia Advertising, Inc. has announced that the Company, through its wholly-owned subsidiary, TechMedia Advertising Mauritius , has entered into a Joint Venture Development and Operating Agreement with Peacock Media Ltd in India.
In accordance with this Agreement, TMM and PML will form a new company (the “Joint Venture Company”) where TMM will own 85% and PML will own 15%. The Joint Venture Company will operate the business of displaying mobile digital advertising platforms in public transportation vehicles such as long-distance buses and trains in India (the “Business”). These newly-fitted buses and trains will display third party commercial contents and advertisements for a fee.
Under this Agreement, PML will assign to the Joint Venture Company the exclusive rights to use the license to operate the Business on 10,392 long distance buses within the Tamil Nadu State, where PML has a 5 year exclusive license. The initial Board of the Joint Venture Company will be comprised of the following directors, namely Messrs. Sandeep Chawla and Kuljit Suri of PML, and Messrs. Johnny Lian, Ratner Vellu and William Goh, directors of the Company.
TechMedia will on a commercially reasonable best effort basis raise up to US$25,000,000 which it expects to loan in certain tranches through TMM to the Joint Venture Company over the first 5 years of the Joint Venture Company’s business. Out of the US$25,000,000, US$5,000,000 is to be set aside as a contingency fund for the Joint Venture Company’s working capital needs. In addition, TechMedia will provide management knowledge and skills to manage the operations of the Joint Venture Company while PML will ensure the technical platform operates smoothly.
Upon the Joint Venture Company reaching profitability, the Joint Venture Company shall pay its 5 directors collectively a management fee equivalent to 10% of the gross profit per quarter subject to a minimum annual fee of US$2,000,000 for the first year, which shall be shared equally among the directors, repay any TMM loans, and any remaining profit will be distributed to TMM and PML as a dividend on the basis of TMM receiving 85% and PML receiving 15%.