Frontrange Limited
(Incorporated in the Republic of South Africa)
(Registration number 1997/009928/06)
("FrontRange")
Share code: FRO ISIN: ZAE000035325
FrontRange boosts stake in US-subsidiary to 95%
FrontRange Solutions Inc., the United States-based subsidiary of JSE Securities
Exchange-listed FrontRange Limited, has bought back the 11.4% stake held in it
by Peregrine Systems Inc. for a total cost of $1,6-million (R12,8-million).
The company also disclosed that in spite of the economic uncertainty surrounding
current geopolitical events, it considers itself to be on track to show a modest
profit for the full year to 30 June 2003, and that its cash position continued
to improve during the quarter ended March.
The buy-back effectively boosts FrontRange Limited"s holding in its US-based
subsidiary from 84% to just over 95%. The transaction was funded from FrontRange
Solutions" existing cash reserves and was completed on the 8th of April 2003.
The buyback results in FrontRange retaining cash reserves of over $13 million
with no long-term debt.
Says Dana Buys, chief executive of FrontRange Limited: "Peregrine Systems is
currently under Chapter 11 bankruptcy protection and wanted to dispose of its
non-core investments. We consider this to be an excellent deal for our
shareholders as it represents approximately a discount of 36% to the current JSE
valuation. The deal was negotiated on the basis of liquidity and minority
discount in the privately held FrontRange Solutions."
Buys adds that the benefits of the transaction will include a significant
simplification of the FrontRange group"s holding structure and a common board of
directors for both the public and the operating entities. Changes to the board
structure will be announced once the consolidation process has been completed.
Julian Pienaar, Financial Director of FrontRange Limited, says that settling the
buy-back from existing cash resources is the most value-enhancing option for
shareholders.
"FrontRange has generated positive cash flows over the last five quarters and
has a strong balance sheet. This transaction will ensure that investors receive
a greater portion of the earnings of FrontRange Solutions Inc.," says Pienaar.
Johannesburg
9 April 2003
Investment Bank and Sponsor
Nedbank Corporate
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