Aqua Online Holdings shareholders are to receive 14c a share after the group, smarting from changes in the online gaming industry, disposes of its operations, delists and winds up its business.
The e-commerce enablement and administrative support services provider listed on the JSE at the end of 1999.
CEO Brent Shahim says the decision was taken in light of poor performance and future prospects, and is necessary to protect shareholder value.
The group incurred a headline loss of 4.2c a share for the year to end-June, compared with a headline profit of 8.3c a share the previous year.
The group blamed restructuring costs and the fact that the online gaming market's growth slowed significantly after large US banks began regulating e-gaming credit card transactions, raising barriers to entry and forcing existing players to consolidate.
The market contraction affected Aqua's software distribution pipeline, making a short- to medium-term improvement in gaming unlikely.
Shahim says the enablement division's margins have remained tight and limited growth is expected with the slowdown in corporate IT spend.
He says the group has continued to incur operating losses since the year-end, despite cost-saving steps that included relocating the London-based operations to SA.
The enablement business is to be disposed of to the original owners and existing management, while the gaming operations will be disposed of to the original owners and Cyber Finance Investments.
The total disposal price is R37.3 million.
Shahim says the disposals and delisting are subject to shareholder and regulatory approval. About 40% of shareholders eligible to vote have already given irrevocable undertakings to vote in favour of the relevant resolutions.
He says the 14c distribution is a 27% premium on the year-end net tangible asset value (NTAV) of 11.01c a share and significantly higher than the current NTAV considering the losses incurred since.
The group says the distribution is also 46% higher than the past three month's weighted average share price of 9.5c.
A final liquidation distribution, which the group does not expect to be material, may also be paid after the voluntary winding-up.
The Aqua Online share price was unchanged at 15c this morning.
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