FRT - Faritec - Update to shareholders and suspension of securities

Release Date: 30/04/2010 09:21
Code(s): FRT
Wrap Text

FRT - Faritec - Update to shareholders and suspension of securities Faritec Holdings Limited (Registration number 1998/004872/06) Share code: FRT ISIN: ZAE000016838 ("Faritec" or "the Company") UPDATE TO SHAREHOLDERS AND SUSPENSION OF SECURITIES UPDATE TO SHAREHOLDERS Shareholders are referred to the previous cautionary announcements (the last of which was dated 26 April 2010) in relation to the steps that Faritec is taking to address its current financial difficulties, including: - the proposed scheme of arrangement with the unsecured creditors of the Faritec group; - the discussions with a management consortium and Tabara Investments (Pty) Ltd to raise R30 million in capital; and - the disposal of certain assets that have been identified as non-core to Faritec`s operations. Shareholders are advised that, as part of the steps detailed above, Faritec has disposed of its Microsoft Large Account Reseller Business to First Technology (Pty) Ltd with effect from 21 April 2010 for a cash consideration of R2.2 million. Faritec has also received various offers to acquire its managed services business. The offers include an offer from Peter Winn, a former director, to acquire the business for a cash consideration of R3.1 million. Any disposal of the business to Peter Winn would constitute a related party transaction and would be conditional on the requisite shareholder approval or receipt of a dispensation from the JSE from the requirement to obtain shareholder approval in terms of schedule 13 of the JSE Listings Requirements. Faritec is considering but has not yet accepted any of the offers. Despite the various steps been taken by Faritec the Company`s working capital is under pressure and Faritec remains in a precarious financial position. SUSPENSION OF SECURITIES Given that Faritec is engaging with a number of parties in relation to the various steps been taken by it and given that the situation is constantly evolving, the board of Faritec is concerned that it may not be in a position to ensure the confidentiality of unpublished price sensitive development or to ensure that the market is adequately and timeously informed of any and all price sensitive developments as these occur. These concerns are exacerbated by the fact that it appears that confidential information is being leaked from within Faritec to one or more financial publications. In the circumstances the JSE has, at the request of the board of directors suspended the trading of Faritec shares with immediate effect. Faritec will take all steps available to it to ensure that trading in Faritec`s shares resumes as soon as possible. In the opinion of the board the suspension should be lifted as soon as Faritec is able to provide shareholders with a greater degree of certainty as to the outcome of the current steps being taken to address Faritec`s financial difficulties. The board envisages that it should have greater clarity in this regard within the next two weeks. 30 April 2010
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