Intervid sells US operations to focus on Africa, UK
May 11, 2004
By Margie Inggs
Durban - Intervid, the information technology company recently embroiled in a boardroom battle, would sell its US operation and focus on its two major geographic markets, Africa and the UK, it said yesterday.
Mark Taylor, the chief executive, said the move would improve the company's financial position as the North American business, which was still in an early stage of its development, had required constant support.
"Due to continuing losses and cash burn in the North American business, Intervid has concluded a heads of agreement with the management of Intervid North America to sell the business to them," he said.
"The agreement we have reached with the US management is a win-win solution for our North American business and ourselves, as we will stop the cash burn and losses immediately and still have the option of acquiring a shareholding in Intervid North America at a later stage," said Taylor.
Market opportunities remained attractive in the UK and Africa, which represent the largest part of Intervid's business.
Taylor said the strong management team in the UK business had made progress in improving their results.
"Africa is our home market where we have now made some management changes and have started rebuilding this business after the damage of the abortive takeover attempt by the Howard family in February this year."
Following a dispute with VenFin, Rob Howard resigned from the board last month.
"Intervid Australia and Intervid Middle East are also expected to continue to grow their relatively small businesses and are on track to become profitable," he said.
"These areas present attractive future growth opportunities."
Intervid also issued a cautionary statement yesterday, indicating that the company was still in negotiations with RFS Holdings regarding the conversion of the convertible loan.
Intervid closed unchanged at 45c yesterday, while the sector lost 3.71 percent.
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