Investment in Favim Holding Limited

RNS Number : 4808P

TMT Investments PLC

25 October 2012

 



25 October 2012

TMT INVESTMENTS PLC

("TMT" or the "Company")

Investment in Favim HoldingLimited

TMT Investments PLC, which invests in high-growth, internet-based companies across a variety of sectors with the potential to become multinational businesses, is pleased to announce the completion of an investment in Favim Holding Limited ("Favim"), an online photo sharing and collecting service. 

TMT has acquired 10,000 newly issued common shares representing 20% of Favim's fully diluted equity capital, for an aggregate consideration of US$300,000.

The agreements between the parties include pre-emption rights, information rights, veto rights and other rights and protections in favour of TMT.  Pursuant to its rights under the agreement, TMT has appointed German Kaplun to the board of Favim.

TMT has an option to subscribe for additional shares in Favim for an aggregate consideration varying from US$100,000 to US$200,000.  The option may be exercised after the first anniversary of the transaction.

Favim has developed a system that allows users to add their own or third-party images from the Web to their personal galleries on favim.com in just two easy steps.  Favim uses an innovative system that uses colours as well as tags to identify unique and inspirational pictures.  The most successful web service comparable to favim.com is Pinterest which, according to www.dreamgrow.com, is currently a top 5 social networking site with over 1% global market share in terms of audience.

Favim was incorporated in the British Virgin Islandsin July 2012, and is the brainchild of Artem Bachynskyi, a 22-year old software engineer who graduated from Khmelnitsky National University (Ukraine).

Alexander Selegenev, Executive Director of TMT Investments PLC, commented: "Last year we invested in Wanelo, which is a social store curated by users and successfully operating in the consumer e-commerce segment through the use of visuals and social media.  We also invested in DepositPhotos, which provides web-based, royalty-free access to millions of images, from vector graphics to professional photos in an easy-to-use format.  TMT's investment in Favim is another step in diversifying and reinforcing our presence in these markets, which we believe continue to represent a promising investment opportunity."

Definitive agreements for the transaction were entered into, and the transaction was completed, yesterday.  Favim did not have any financial accounts in respect of the year ended 31 December 2011.

For further information contact:

TMT Investments Plc Mr. Alexander Selegenev www.tmtinvestments.com	[phone] [e-mail]
ZAI Corporate Finance Ltd. NOMAD and Broker Marc Cramsie/Irina Lomova	[phone]
Kinlan Communications David Hothersall	Tel. [phone] [e-mail]

About TMT Investments

TMT Investments PLC invests in high-growth, internet-based companies across a variety of sectors with the potential to become multinational businesses. Founded in 2010 and with capital firepower of USD26m, TMT has invested in 21 companies to date. The company's objective is to generate an attractive rate of return for shareholders, predominantly through capital appreciation. The company is traded on the AIM market of the London Stock Exchange. www.tmtinvestments.com

The Investment Policy & Strategy

The Company's objective is to generate an attractive rate of return for Shareholders, predominantly through capital appreciation, by taking advantage of opportunities to invest in the TMT Sector. The Company aims to provide equity and equity-related investment capital, such as convertible loans, to private companies which are seeking capital for growth and development, consolidation or acquisition, or as a pre-IPO financing.

In addition, the Company intends to invest in publicly traded equities which have securities listed on a stock exchange or over-the-counter market. These investments may be in combination with additional debt or equity-related financing, and in appropriate circumstances in collaboration with other value added financial and/or strategic investors.

The Company is not geographically restricted in terms of where it will consider making investments. It will consider any geographical area, to the extent that the investment fits within the Company's investment criteria. The Directors and Consultants have expertise in emerging markets and, in particular, in Russia and the Commonwealth of Independent States. The Company will not be subject to any borrowing or leveraging limits.

Private Companies

The Company will target small and mid-sized companies and will seek to secure at least blocking stakes and board representation, where it considers that the Company and/or an investee company would benefit from such an appointment. The Company will consider making equity investments in lower than blocking stakes only where it sees ways to increase the stakes to blocking or controlling stakes at a later date. Each investment is expected to be at least US$250,000.

The investments targeted by the Company will aim to support rapidly-growing private companies to increase market share and achieve long-term shareholder value. It is envisaged that if the Company invested in a private company prior to that company listing on a stock market, the Company would retain a part of its investment in the listed entity going forward. The Company intends to work closely with the management of each investee company to create value by focusing on driving growth through revenue creation, margin enhancement and extracting cost efficiencies, as well as implementing appropriate capital structures to enhance returns.

Public Companies

When investing in public equities, the Company will seek to select companies with a dominant market share or strong growth potential in their respective segments. No restrictions will be placed on the size of public companies in which the Company may make an investment. The Directors intend to make investments in companies or businesses with attractive valuation, growth potential, with competent and motivated management, which enjoy brand recognition, have scalable business models, have strong relationships with customers and have in place transparent accounting policies.

Realisation of Returns

The Directors will, when appropriate, consider how best to realise value for Shareholders whether through a trade sale, flotation or secondary refinancing of the investee companies. The proposed exit route will form a key consideration of the initial investment analysis.

The Company expects to derive returns on investments principally through long-term capital gains and/or the payment of dividends by investees. The primary ways in which the Company expects to realise these returns include: (a) the sale or merger of a company; (b) the sale of securities of a company by means of public or private offerings; and (c) the disposal of public equity investments through the stock exchanges on which they are listed.

For private investee companies the Company believes that its typical investment holding period should provide sufficient time for investee companies to adequately benefit from the capital and operational improvements resulting from the Company's investment. The targeted holding period shall be reviewed on a regular basis by the Company, but it is expected that this will typically be between two to four years. For public equities the Company's objective is to maximise capital appreciation. Following the acquisition, the Company will continue to conduct extensive research and monitoring of the investment. Importance will be placed on the timing of any disposal which will follow a thorough review of market conditions and those reports and sources that are available to investors. Should the Company consider that the capital appreciation of a particular public equity investment has reached its peak or is likely to or has begun to decline, then the Company will consider the sale of that investment.

 

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