Section Rouge Media Inc. is selling Image in Media Inc., its subsidiary publishing division, to a group headed by its original owners, Pierre Bernatchez and Luigi Porco.
The company will sell in exchange for about 9.4 million common shares of Section Rouge controlled by the Bernatchez/Porco group, as well as for a convertible debenture worth about $1.4 million. The total value of the deal is about $3.2 million.
Section Rouge (SRO on the TSX) originally purchased Image on July 13, 2006 for a deemed price of about $4.2 million. According to a company document released in August 2007, Image was not meeting the profitability and growth expectations of Section’s board of directors