PeerTV rockets as it looks to cut stake in Digitek

Shares in PeerTV rocketed after the company announced a proposed capital restructuring of cash-hungry subsidiary Digitek.

PeerTV, which provides technology solutions for the television set-top box industry, has agreed with loan noteholders of Digitek to exchange 100% of the notes in issue for 75% of the ordinary share capital and 75% of the preference share capital of Digitek.

PeerTV said the offer has been made in light of weaker-than-expected second and third-quarter operating results from Digitek and the unit’s inability to finance itself.

In addition, PeerTV, which has advanced around £2.6m directly to 64.1%-owned Digitek over the past three years, said it was reluctant to continue supporting the business.

The debt for equity swap would reduce PeerTV’s stake to 25%, with Digitek loan-note holders owning the rest.

Chairman Eitan Yanuv said: “Over the past three years the Digitek business has required increasing amounts of capital and has utilised a disproportionate amount of the group's resources.

“We believe that Digitek's operation as an independent business will be beneficial to all stakeholders. The exchange offer will help strengthen the PeerTV group balance sheet and facilitate focus on the OTT business which we feel is of greater interest to our shareholders."

At 1130 BST, PeerTV shares were up 106% to 0.03p.