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ARCHIVED - Broadcasting Decision CRTC 2003-79

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Broadcasting Decision CRTC 2003-79

Ottawa, 28 February 2003

Novus Communications Inc., on behalf of Novus Entertainment Inc.
Vancouver, British Columbia

Application 2002-0784-6

Transfer of effective control of Novus Entertainment Inc.

1.

The Commission received an application by Novus Communications Inc. (formerly Novus Telecom Group Inc. (NCI)), on behalf of its wholly-owned subsidiary Novus Entertainment Inc., (Novus, the licensee), to effect a transfer of effective control of NCI, and consequently the indirect control of Novus. Novus is the licensee of a Class 1 cable distribution undertaking serving part of Vancouver, British Columbia.

The transaction

2.

On December 5, 2001, Novus filed for protection under the Companies' Creditors Arrangement Act. In response to its creditors' demand that a refinancing plan be presented, Novus proposed that Stonegate Estates Ltd. (Stonegate) would invest in Novus through the purchase of voting and non-voting shares in NCI's share capital.

3.

The change in effective control will be implemented through the issuance of additional shares in NCI to Stonegate. As set out in the Subscription Agreement filed with the application, Stonegate will receive 342,000 Class A Voting shares, representing 68% of the voting interest of NCI, and 13,658,006 Class B non-voting shares.

4.

According to the Subscription Agreement, the purchase price for the additional NCI shares is $1,000,000. In view of the licensee's financial difficulty, the Commission considers that the value of the transaction is adequate.

Integrity of the licensing process

5.

Novus' distribution undertaking was first licensed in New cable distribution undertaking - approved, Decision CRTC 96-224, 13 June 1996, and control of the licensee was transferred to NCI in 1999.

6.

When a change in the ownership or control of an undertaking is proposed soon after an earlier change, the Commission examines such proposals carefully, in order to ensure that the vendor will not profit overly from the sale and that the integrity of the licensing process is maintained.

The Commission's decision

7.

The Commission has considered the circumstances of this application and concludes that, in light of the financial difficulties of the licensee, the proposed transaction does not raise a concern. The Commission is of the opinion that approval of the application would be in the public interest.

8.

Accordingly, the Commission approves the transfer of effective control of NCI, and the related transfer of indirect control of Novus and it will modify its ownership records accordingly.

9.

The licensee must inform the Commission of the date of the completion of the transaction.

Secretary General

This decision is to be appended to the licence. It is available in alternative format upon request, and may also be examined at the following Internet site: www.crtc.gc.ca

Date Modified: 2003-02-28

Date modified: