Private Plans to Restructure With Focus on Core Business
BARCELONA — Private Media Group last week filed a notification of late filing with the U.S. Securities Exchange Commission for its 2011 annual report, citing important financial and corporate records that are "in disarray and/or missing."
The adult entertainment giant said that those problems, among others, have contributed to the delay in completing the annual 10-K report, which is required for registered U.S. public companies.
Private, which recently installed Charles Prast as president as well as a new board of directors, is working to strengthen its financial position and improve operations, the company told regulators in an 8-K filing. It plans to restructure its "business, products, and geographic focus to conform to the company’s core business."
With the restructuring, the company plans to reduce its corporate overhead by reducing the number of employees, streamline operations and increase sales with the help of distributors and retailers.
Private also has been in negotiations with certain of its principal creditors to restructure and is planning to repay the company’s debts through the issuance of new securities.
"In order to enhance its liquidity and strengthen its balance sheet, the company is in discussions with a limited number of potential investors to raise additional capital," Private said.
Private further said that it is attempting to settle various lawsuits that were filed against the company while it was under prior management and is re-evaluating both the company’s prior expansion of its operations outside of its historical European sphere of operations.
The company also plans some expansion of its product offerings but expects to close or dispose of some non-core operations and subsidiaries.
Private said that it isn't certain when the annual report will be completed but that its working with independent registered public accountants BDO Auditores S.L. to complete the audit of the company’s 2011 financial statements.
In March, Prast took the top slot held by Private's Sureflix division's president, Eric Johnson, who had been carrying out the responsibilities of CEO and CFO during a long and contentious shareholder and creditor rights battle.
Johnson had been appointed as receiver by a Nevada court last year.
In January, Private announced the election of the company’s new board of directors to include Johnson, Ilan Bunimovitz, Anna Maksimova, Michael Martinez, James McCormick and Prast, who now acts as the company’s president, CEO and interim CFO.
The board of directors earlier terminated company co-founder Berth Milton as its president and CEO after they suspended him in mid December.
The company operates scores of divisions, including Cine Craft Ltd. of Gibralter, Coldfair Holdings Ltd of Cyprus, Fraserside Holdings Ltd. of Cyprus, Peach Entertainment Distribution AB of Sweden, Milcap Media Group S.L.U. of Spain, Private Media Group Services S.L. of Spain, Private Benelux B.V. of The Netherlands, Private France SAS of France, Private North America Ltd. of California, Barbuda B.V. of The Netherlands, Ceresland S.L. of Spain, Private Media Group Canada Inc. of Canada, Fraserside IP LLC U.S. of Iowa, ThinkForward Inc. of California, Mama’s LLC U.S. of Delaware, GameLink LLC of Delaware, eLine LLC of Delaware, Sureflix Digital Distribution Inc. of Delaware and Entruphema Inc. of Canada.