The Vox Telecom share price has taken a severe knock over the last two days, following the demise of Dealstream Securities. But management have assured shareholders that the company is healthy and its exposure to Dealstream negligible.
The Vox board has evaluated the maximum after tax loss in relation to the Dealstream events and concludes that the potential loss is less than 5 cents per share.
"Vox used Dealstream to acquire treasury shares in the open market," reads a statement. "Dealstream held approximately R30-million of Vox cash, the recoverability of which the company believes has been materially prejudiced. This amount arose from the disposal of Vox treasury shares acquired and placed in terms of the company`s general authority.
"The balance of the potential loss relates to a provision for legal and related costs that may be required and staff loans that may, as a consequence of the Dealstream events, need to be impaired."
Vox states that the directors' exposure to Dealstream does not impact the potential loss pertaining to the company, and the directors' accounts had positive cash
balances while the directors were not in default of their margin requirements prior to Dealstream ceasing trading.
The company stress that it employs more than 700 people and has annualised revenues of about R2-billion, providing telecommunication services to more than 185 000 customers.
"The company considers that the sharp decline in the share price in recent days is a function of the close out of derivative positions following the Dealstream events and is unrelated to operating fundamentals of the business, which remain sound," the statement reads.
"The sompany is evaluating its legal position in relation to the Dealstream events and in particular the claims it has against Dealstream, its directors and related parties, including in relation to any criminal actions," it adds.