Former Greensleeves owner raises $40m
The cash-strapped Zest Group has raised £300,000 ($40.8 million) which will allow it to survive the disposal of reggae label Greensleeves and focus on movie and music deals for reggae singer Nasio Fontaine.
The UK-based group which is also a label said it raised the money “through a placing of new shares to fund its working capital requirements”. However it needs to raise further funds by year end.
“The group is actively managing its cost base and has reduced its overheads but will need to raise further funds for working capital by the end of the year. The group has continued to incur losses to date and is reliant on external funding,” Zest chairman Richard Griffiths stated in the chairman’s report accompanying financials released late June.
Zest said it was still seeking to conclude a distribution deal for Fontaine’s five albums of which it owns 100 per cent of the masters and publishing rights for the Dominican-born artiste.
“We have suffered delays on the sales of Nasio Fontaine’s catalogue with the current distributor and publishing administrator,” said Griffiths. “Although we expect this issue to be resolved in the final quarter of this year, we have been in negotiations to secure a new worldwide distribution deal. In addition one of Nasio’s songs has been placed in a movie which is due to be released during the first quarter of 2011.”
The working capital was raised in November 2009 but not disclosed until the end of June. The group incurred a £194,000 ($26.4 million) loss for the six months ending March 2010 which was worse than the £113,000 ($15.3 million) for the corresponding period in 2009.
On February 15, 2008, Zest disposed of its entire shareholding in Greensleeves Records Limited, Greensleeves Publishing Limited and Greensleeves USA, its reggae music publishing business, for a £3 million plus deferred consideration of £100,000 (totalling $421 million, at the current exchange rate).
Rival VP Records bought the reggae label to become the largest independent reggae label in the world. Critics stated that it would reduce avenues for reggae artistes to negotiate contracts, especially with the music industry in continued contraction.
