Cape Empowerment Trust is to sell cabling subsidiary Dynamic Cables to Conlog, which aims to restyle itself in the telecommunications sector.
CET announced the details of the sale of Dynamic Cables as it emerges from a very difficult six months, with headline earnings taking a 63.3% dip from the previous period.
Dynamic Cables is an importer and distributor of French Alcatel and other telecommunication and related products and has recently had its contract with Telkom renewed.
The consideration price for Dynamic cables is two-and-a-quarter times the audited consolidated after tax profit of Dynamic Cables and its subsidiaries for the period 1 January to 1 December 2001.
The final price will be two-and-a-quarter times the audited consolidated after tax profit for the company for the same period in 2002 or R16 million, whichever is greater.
It is to be settled with R4 million cash on the day the sale becomes unconditional. At the same time a loan account of 12 million will be set up for CET to attract interest at the prime rate.
Interest will be payable on demand per quarter as long as the payment does not exceed R4 million. The first payment is due in the first quarter of 2001.
The balance will be settled in either cash or Conlog shares at an issue price of 60c per share.
Conlog has that says should the deal be approved, it will be restyled and listed on the telecommunications sector of the JSE Securities Exchange.
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