JSE-listed FrontRange`s stake in US-based FrontRange Solutions has increased from 84% to 95% after the US company bought back the 11.4% stake held in it by failed Peregrine Systems.
FrontRange Solutions paid $1.6 million (R12.8 million).
The company also says it considers itself to be on track to show a modest profit for the year to 30 June 2003 and that its cash position continued to improve in the March quarter.
FrontRange says the share buyback from Peregrine was funded from FrontRange Solutions` existing cash reserves. It retains cash reserves of more than $13 million with no long-term debt.
"Peregrine Systems is currently under Chapter 11 bankruptcy protection and wanted to dispose of its non-core investments," says FrontRange CEO Dana Buys. "We consider this to be an excellent deal for our shareholders as it represents a discount of 36% to the current JSE valuation.
"The deal was negotiated on the basis of liquidity and minority discount in the privately held FrontRange Solutions."
Peregrine acquired the stake in 1999 in a share swap deal.
Buys says the benefits of the buyback include a significant simplification of the group`s holding structure and a common board of directors for both the public and operating entities. Changes to the board structure are expected to be announced at a later date.
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