| Wed 4 Dec 2002, 17:53 | | PRISM HOLDINGS LIMITED - PRISM AND ALTECH TERMINAT |
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PRISM HOLDINGS LIMITED - PRISM AND ALTECH TERMINATE PTSS ACQUISITION TALKS
4 December 2002
SECURE ELECTRONIC PAYMENTS company, Prism Holdings, and Allied Technologies
Altech) have terminated discussions that would have resulted in Altech acquiring
Prism TranSwitch Services (PTSS) for R47-million in cash.
Prism CEO Alvin Els cites `irreconcilable positions` and a positive turnaround
in Prism`s current trading position and longer-term pipeline, as reasons for the
decision to call off negotiations.
"We had planned to use the proceeds from the disposal of PTSS to strengthen our
balance sheet by reducing debt and enhancing working capital. Fortunately, this
is no longer necessary.
"The decision to end discussions was not taken lightly. The Prism board of
directors consulted with and obtained the support of our major shareholders as
well as our key lenders", he says.
According to Els, the termination of negotiations will have little impact on
Prism`s previously announced recapitalisation process that will take the form of
a Rights Issue early next year. This will provide the foundation for the
company`s refinancing.
PTSS is South Africa`s leading electronic funds transfer and bill payment
processing services company. PTSS switches over 150 million transactions per
annum on behalf of major retailers, utilities and financial institutions.
Prism Holdings and Altech announced the signing of heads of agreement relating
to the deal in October.
"However, although the value of the deal was agreed, we were unable to reach
consensus on restraints or on mechanisms that would ensure the protection of
Prism`s Intellectual Property (IP), much of which underpins PTSS`s operations.
"Because Prism`s most important asset is its IP, we are obliged to protect it in
its entirety. During our negotiations with Altech, it became apparent that
mutual concerns surrounding IP rights could not be adequately addressed. In
addition we felt that the restraints required by Altech could have negatively
impacted ongoing trading in Southern Africa and, in whole or in part,
constrained Prism`s capability to deliver its complete payments proposition to
its current and future customers in the region." he explains.
"One of the positives to emerge from the negotiations is that it forced us to
further `ring-fence` PTSS. This has enabled us to formulate operational
mechanisms that will resolve much of the conflict we experienced in the past in
meeting the needs of our product and solutions customers.
"In effect, Prism is now well positioned for focus on the provision of products
and solutions to service providers in the secure electronic payments space while
simultaneously providing a value-added switching service to SA`s retail, utility
and financial services sectors.
"In addition, Prism will maintain a close working relationship with Altech,
which utilises some of our cryptographic security and other products," Els
concludes.
NOTE TO EDITORS
JSE-listed Prism Holdings is a world leader in the secure electronic transaction
market. With a growing presence in Europe and South-East Asia, Prism is one of
the few companies in the world offering services solutions and products that
bridge the following core technologies:
* Security - sophisticated cryptographic security solutions, many developed
using own intellectual property resources;
* Payment solutions in the physical and virtual (Internet and wireless) realms;
and
* Smart card technologies spanning both wireless communications and electronic
payments.
Issued by: Citigate Ballard King +27(0) 11 804 4900
For: Prism Holdings +27(0) 11 548 1000, www.prism.co.za
Contact: Alvin Els, CEO, Prism Holdings 083 263 2754
Steven Sidley, Group Marketing Director 082 600 6857 or Marilyn de Villiers,
Citigate Ballard King
Date: 04/12/2002 05:35:02 PM Produced by the JSE SENS Department
