Consumer Industries Editor
CAPE TOWN Media group Primedia has sold one of its three remaining direct marketing companies in the UK, the unprofitable fulfilment and telephony company Spark Response, to a consortium led by management for R22m in cash and debt, it said yesterday.
The sale is in line with the group's strategy of selling noncore assets. The deal will see Spark's management invest a further GBP 500000 in the firm. While Primedia has no further commitment to fund Spark, it will benefit from 50% of the capital appreciation in Spark at the end of the next three years.
"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," Primedia CEO William Kirsh said yesterday.
Spark contributed a loss of R14,6m to Primedia in the year to June on turnover of R154,8m. As a result of this deal, Primedia's net interest-bearing debt will fall to R51,4m from R73,4m at the end of December, which brings gearing down to 9% from 13%.
There are now two remaining firms in Primedia's one-to-one division in the UK: Wheel Holdings and The Database Group. Kirsh said Primedia intended to dispose of these two businesses in due course.
The group has two other noncore offshore businesses, Ster Century Europe and Ster Century Middle East. Kirsh said there was no finality on when the disposal of Ster Century Middle East would occur and, as previously announced, the group hoped to make an announcement on the disposal of Ster Century Europe by the end of the current financial year.
Apr 15 2003 07:07:56:000AM Charlotte Mathews Business Day 1st Edition
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