Faritec Holdings may have found a solution to its fund raising problems and, if a debt-to-equity arrangement succeeds, the company believes it will be in a position to make a full recovery.
Yesterday, it was announced that Shoden Data Systems and certain members of the Faritec management team committed to contributing R30-million of fresh equity into the company by partially underwriting a R60-million rights offer, subject to a number of conditions.
These conditions include the implementation of a scheme of arrangement between Faritec Enterprise Solutions and its creditors, in terms of which the various classes of creditors will be asked to either convert their debt to Faritec equity or compromise their debt. Shoden and other creditors to the value of R25-million have already indicated their willingness to convert debt into equity.
As soon as there are sufficient irrevocable undertakings from creditors to support the scheme, Shoden and the management consortium have agreed to immediately advance R30-million to Faritec as a bridging loan pending the implementation of the rights offer.
If the scheme the rights offer are implemented, the board is of the opinion that Faritec will be well positioned to recover strongly, it says in a statement.
Faritec expects to announce the precise terms of the scheme and the levels of support from creditors within a week.