Control Instruments (CI) has disposed of its Internet connectivity service business, Data Pro Services, to Prostart in a management buyout (MBO) worth R30 million. The move forms part of CI`s plans to focus on its automotive electronics business.
The disposal sum of R30 million includes a 6.5% interest per annum fee to be compounded monthly in arrears from 1 April 2001 to the date of payment. Proceeds will be used to fund the working capital requirements of CI`s automotive electronics business.
Aspects of the Data Pro business involved include the Web development department, its Johannesburg, Durban and Cape Town sales departments, and its technical and administrative departments. CI`s investment in On-Track remains unaffected.
The group calculates the deal would have had a material boost on headline earnings per share of 115% for its previous financial year.
The disposal is subject to shareholder approval as well as JSE approval. The group has warned investors it is still trading under cautionary.
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