ConvergeNet to shed jobs amid massive restructure
ICT infrastructure supplier, ConvergeNet, has announced its intention to restructure, prompted by its deteriorating financial performance as a result of a combination of excessive costs and a lack of strategic focus.
The group will close its head office in Centurion, and “has commenced retrenchment consultations with employees at its head office”.
The restructure will entail the disposal of certain non-core subsidiaries; the comprehensive rationalisation of the group´s legal structure, and a restructuring of the authorised and issued share capital of the company by way of a share consolidation.
Following the implementation of the proposed Restructure, ConvergeNet said it will initially comprise only Andrews Kit and Structured Connectivity Solutions.
ConvergeNet said it is already in discussions with potential new investors as well as acquisition targets regarding the sale of its other businesses within the group.
“Closure of the head office will immediately alleviate cash flow pressures in the group and allow excess liquidity to be used to expand existing operations, fund high quality acquisitions and finance the payment of cash distributions to shareholders,” it said in a statement on SENS.
In April, ConvergeNet reported an operating loss of R28.6 million for the six months ended 28 February 2013, compared to an operating loss of R8.3 million for the corresponding period before.
The expected finalisation date of the closure of the company´s head office is 31 December 2013. ConvergeNet will transfer its registered head office to its Johannesburg premises of its corporate advisor, AfrAsia Corporate Finance, on an interim basis.
The company noted that it is considering the appointment of its current CFO, Danie Bisschoff, as CEO of the restructured group on an interim basis.
ConvergeNet said it has 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 for the purpose of acquiring the Sizwe Shares.
ConvergeNet also pointed out that Sizwe’s board of directors have accepted an offer from Daki Nkanyane to acquire 100% of its shareholding (being 74%) and loan claims in EQ Tickets for R5 million.
EQ Tickets offers technology for ticketing, admission control, accreditation, loyalty and membership.
ConvergeNet also aims to sell its 51% interest in SIMAT Management as a well as its 66% interest in X-DSL, and a 100% interest in Telesto, the latter company for an amount of R7.3 million.
The ICT firm is also hoping for a more stable market capitalisation through a proposed share consolidation on a 10 to one ratio.
More on ConvergeNet
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ConvergeNet sees extended loss
ConvergeNet anticipates big earnings fall
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