It also advised its shareholders that ConvegeNet Management Services (CMS) has entered into a share purchase agreement with Titan to purchase approximately 71.48 million ConvergeNet ordinary shares, representing 7.759% of the issued share capital of the group.
The deal translates into 29.675 cents per share, or R21.21 million.
Shares in ConvergeNet dropped a cent to 30 cents on the JSE.
Future Cell is a focused mobile telecommunications company and operates in the pre-paid distribution business. It distributes its pre-paid products in a number of provinces countrywide.
By way of rationale for its sale of Future Cell, ConvergeNet said it would exit sub-scale or loss making business units, as well as minority interests where it has no strategic influence.
“The strategy of the company going forward will be to focus on identified core operations and to grow these organically and via a disciplined acquisition strategy,” it said.
ConvergeNet said that the sale proceeds will be more profitably-invested in a return of cash to shareholders via a share repurchase, and by investing in the expansion plans that have been approved for its core operating subsidiaries.
Proceeds from the Future Cell transaction will be partially used to fund the Titan share purchase transaction, with the balance to be used for general corporate purposes, including expansion capital for underlying subsidiary companies.
The ICT player said the agreed purchase price of 29.675 cents represents an attractive investment opportunity.
“The purchase provides a unique and attractive opportunity to return value received from the Future Cell Transaction to ConvergeNet shareholders. The purchase also provides the company with additional flexibility in relation to its future funding requirements, including in respect of potential acquisitions and a new BEE transaction,” ConvergeNet added.
Earlier this year, ConvergeNet underwent significant restructuring after a consortium bought out a majority stake, leading to a number of directors stepping down from the company.
In April, it reported a decline in revenue for the six months ended February 2012, along with an operating loss, primarily as a result of the delays in awarding and implementation of some major contracts.
Revenue slipped to R416.52 million, from R496.57 million in 2011; while the group noted an operating loss of R24.7 million compared to an operating profit of R19.2 million in the corresponding period before.
It also reported a diluted headline loss per share of 1.82 cents from diluted headline earnings of 1.34 cents before.