Deteriorating financial performance has prompted the restructure of ConvergeNet, entailing the closure of the company’s head office, the disposal of some non-core subsidiaries, rationalisation of its legal structure, and a restructuring of the authorised and issued share capital by way of a share consolidation, odd-lot offer and specific offer.
Following the proposed restructure, the group will initially comprise only Andrews Kit trading as Contract Kitting) and Structured Connectivity Solutions (SCS), which form, in the board’s view, a solid base from which to build a scalable group that is focussed on the provision of ICT solutions to the private sector across Africa.
The board believes that a more focussed and profitable portfolio of operating assets, combined with a strong group balance sheet, will allow the company to attract new investment to expand and fund the acquisitions of complementary businesses.
The board proposes closing the head office in Centurion, which would then move to the premises of its corporate advisor AfrAsia.
ConvergeNet has already concluded the terms of the sale of 100% of its interest in Sizwe for R120-million to a private company to be incorporated by Hanno van Dyk.
In addition, the Sizwe board has accepted an offer from Daki Nkanyane to acquire 100% of Sizwe’s shareholding (being 74%) and loan claims in EQ Tickets for R5-million.
Meanwhile, the SIMAT Management Company, in which ConvergeNet holds a 51% interest, has entered into a term sheet with Afriswiftcom Investment Holdings, for the sale of 100% of SIMAT SA’s interest in the SIMAT Group for R1, subject to the fulfilment of conditions precedent.
The group has also entered into a term sheet for the sale of 100% of ConvergeNet’s interest in X-DSL. It has also agreed to sell its interest in Telesto for R7,3-million.
There is, in addition, a proposal to restructure the authorised and issued share capital of the company by the consolidation of every 10 ordinary shares currently held in ConvergeNet with no par value into 1 (one) share with no par value. This would result in 200 000 000 authorised shares and 97 093 513 shares in issue.
Meanwhile, Sandile Swana and Tim Modise have resigned as directors of ConvergeNet with effect from 1 August 2013, and Hanno van Dyk has resigned as a director with effect from the completion date of the Sizwe Transaction.