Primedia Limited - Press Release
PRIMEDIA LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1993/003355/06)
JSE Share code: PMA ISIN: ZAE000035119
JSE Share code: PMN ISIN: ZAE000035127
("Primedia")
Primedia disposes of a further non-core asset for R22 million
Primedia today announced that it has reached agreement on the sale of its
interest in Spark Response (Spark), its UK-based fulfilment and telephony
business, to a consortium led by management. Spark is a subsidiary of
Primedia"s one to one division.
Under the terms of the deal, the management consortium will pay Primedia 0.5
million in cash as well as assume 1.2 million of Spark`s bank debt. This
transaction will result in Primedia"s short-term debt being reduced by 1.7
million (R22 million). In terms of the agreement reached with the management
consortium, Primedia also stands to benefit from participating in 50% of the
capital appreciation of Spark that management intends to create over the next
three years. In the year to 30 June 2002, Spark contributed a loss of 1 million
(R14.6 million) to Primedia on a turnover of 10.6 million (R154.8 million).
In order to strengthen the capital base of the company thereby allowing it to
meet the growing demands of new and existing clients, as well as to enhance the
prospects for further capital appreciation, the management consortium will
invest a further 0.5 million into Spark by way of share capital.
Commenting on the deal, William Kirsh, CEO of Primedia, said: "In addition to
reducing our short-term debt by R22 million, the disposal will eliminate a
significant loss maker, as well as improve Primedia"s operating margins. We have
also realised that this business, which has good long-term prospects, requires a
different management approach and the way the deal has been structured will
result in a stronger company from which we all stand to benefit."
Ends
Issued by Brunswick
Di Munro 011 268 5750
On behalf of Primedia
William Kirsh 011 506 3000
082 441 2714
PRESS RELEASE
14th April 2003
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