Seven Arts Entertainment Inc (OTCMKTS:SAPX) is in the process of eliminating a $2 million debt from its books after reaching an agreement for the sale of one of its libraries to The Movie Studio. The library up for grabs has 12 titles and was initially licensed to a lender who is currently struggling with liquidity issues.
One-Time Dividend Looming
The transaction should allow Seven Arts Entertainment Inc (OTCMKTS:SAPX) to allocate a one-time special dividend to shareholders according to the company’s CEO Rick Bjorklund. The dividend is to be offered in the form of a preferred stock.
The transaction according to Bjorklund accords Seven Arts Entertainment an opportunity to concentrate on expanding its business mainly in the digital media space and wireless communications. Going forward the chief expects the company to look for additional opportunities for generating more shareholder value.
The Movie Studio on its parts expects the acquired Library to provide recurring and reliable revenue streams going forward, especially on the growing demand for Video. CEO, Gordon Scott expects distributions agreements with major studios such as Lions gate and 20th Century Fox to play an important role in generating intrinsic shareholder value.
Poor Stock Run
The SAFELA movie library up for grabs consists of films with iconic movie stars such as John Goodman Burt Reynolds and John Malkovich. The acquisition provides TMS a good line of films for domestic and foreign distribution
Seven Arts Entertainment Inc (OTCMKTS:SAPX) has not had the best of rides in the market having seen the downward trend persist in the recent years, made of a series of lower highs and higher lows. It remains to be seen if the stock will rebound from the current lows as the CEO affirms that they are constantly pursuing opportunities for generating shareholder value.