| Thu 14 Mar 2002, 0:00 | | Hicor Re-capitalisation On Schedule |
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HICOR LIMITED
Registration Number 1981/011496/06
("Hicor")
Share Code: HOR
ISIN Number: ZAE000003331
HICOR RE-CAPITALISATION ON SCHEDULE
Hicor, the listed IT group, today announced that they will be seeking
shareholder approval at a general meeting to be held on 28 March 2002 for a
major restructuring of debt through a specific issue of shares.
Danny Pringle, Executive Chairman of Hicor, said "In terms of agreements
reached with the relevant parties, subject to shareholder approval, we will
be able to reduce the long term borrowings of the company by 38% and bring
our overall gearing into a far more manageable position, down from a figure
in excess of 3000%, in September 2001, to approximately 105% after this
proposed re-capitialisation. Considering that a total amount of just over
R9,6 million Rand will be invested into the company through the conversion
of debt into equity by myself, management and staff, not only demonstrates
our full commitment to the company but also our total belief in the future
of Hicor."
According to the circular to shareholders, Hicor's board recommends that
this issue of shares for cash be done in order to further strengthen its
balance sheet; improve the liquidity and cash resources in the company;
improve the debt to equity ratio and to provide cash resources for future
working capital.
"We know that this issue of shares will dilute the Earning Per Share but if
we use the interim financials published for the six months ended 30
September 2001 as base, after the issue of the new shares as proposed and
the divestment of the UK subsidiary announced in January this year, the Net
Asset Value per share increase by 400% and the Earnings Per Share in fact
improves from a negative of 0,9 cents to a positive of 0,1 cents fully
diluted."
"The prospects for Hicor are very promising indeed as the company has now
fully divested from the legacies of the past and is well on the way of
realising the true potential of the restructured Group. The company reduced
its risk substantially through the renegotiation of debts and other
financial and legal risks over the past 18 months and is now poised to reap
the benefits of the seven point plan announced in October 2000 to turn the
company around and is in a position to invest the profits generated by the
core business units into growth, rather than settlement of debt only, as was
required over the past 18 months."
The software product subsidiary of Hicor has blue chip clients in the
banking, financial institution, oil and telecommunications industries and
the newly released solution for the delivery, processing and management of
electronic payments "The Payments Interchange" is claimed to be unique in
its offering in the payment industry on the international front.
According to Pringle, the transaction services subsidiary of Hicor which was
appointed as one of the service providers of South African Revenue Services
(SARS) last year for their e-Filing initiative whereby companies can submit
their tax returns and associated payments securely via the Internet, thus
far showed a slower than expected market acceptance but all indications are
that this business will deliver on the predicted high transaction volume and
associated benefits of recurring annuity style income within the next 12
months.
"I sincerely believe the shareholders will give us their unqualified support
to re-capitalize the company in this manner. The company has gone through
some very tough times during the past 18 months and despite the pessimism
expressed by the market in general, we have managed to survive the major
restructuring process and have indeed turned the company around. We are now
ready for the last and final step in the process of reform and that is to
create and maintain shareholder wealth through the many exciting
opportunities that lie ahead for Hicor both locally and internationally."
14 March 2002
PRETORIA
Enquiries
Michele Mcleod
Public Relations Officer Hicor Limited
Phone: (012) 349 1311
E-mail: Michele.mcleod@hicor.net
Danny Pringle
Executive Chairman & CEO
Hicor Limited
Cell: 082 569 8279
E-mail: danny.pringle@hicor.net
