PPE - Purple Capital Limited - Update On Global Trader Escrow Account
PPE
PPE
PPE - Purple Capital Limited - Update On Global Trader Escrow Account
Purple Capital Limited
(Incorporated in the Republic of South Africa)
(Registration number 1998/013637/06)
Share code: PPE & ISIN: ZAE000071411
("Purple Capital" or "the company")
UPDATE ON GLOBAL TRADER ESCROW ACCOUNT
On 8 May 2008, as part of the release of the Company`s results for the six
months to 29 February 2008 ("interim results"), it was announced that the
Company was pursuing legal action to secure the retention of an Escrow
amount which had been set aside as part of the acquisition of Global Trader.
Based upon legal advice received at that time the Directors believed that
there was a reasonable prospect of receiving these funds. The first step in
the legal process required a notification of our intention to pursue a legal
claim against the Vendors, which notification was sent on 26 February 2008.
The next step was to obtain a ruling from an independent Barrister that the
Escrow be retained pending the prosecution of our claim in the English
courts.
We have now been advised that the Barrister has ruled that no Escrow funds
be retained pursuant to this claim against the Vendors. This ruling has been
based on a technical decision that the notification of claim of 26 February
2008 was procedurally flawed.
If not for this technical point, the Barrister would have been inclined to
find that our claim had a reasonable prospect of success.
The Directors of Purple Capital will consider what further steps may be
taken against the Vendors to recoup losses incurred.
In the interim results, the Global Trader Europe net assets were written
down to zero and the intangible assets allocated to the investment were
impaired; these write-downs amounted to R66,5 million. At the same time, a
receivable of R45,4 million for the receipt of funds from escrow was raised.
In light of the above decision by the Barrister the receivable of R45,4
million (being 14.4 cents per share in issue) will be written off. The net
effect of this write off will be incorporated into the results for the year
ending 31 August 2008.
Johannesburg
29 May 2008
Sponsor
KPMG Services (Pty) Limited
Date: 29/05/2008 16:53:01 Produced by the JSE SENS Department.
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