JSE-listed Intervid, whose CEO and two directors left in April, is to be restructured into two businesses. It has also warned that lower sales will have a worse than expected effect on its financial results.
The Intervid board says in a statement that an independent review of the business operations and strategy was undertaken "following the removal of CEO Rob le Sueur as a director of the company in April 2003 due to irreconcilable differences of opinion with the board on the future direction of the group".
This is the first time Durban-based Intervid has clarified the reason for Le Sueur`s departure. Previously, it published a notice saying only that he was no longer a director and refused to comment further.
Le Sueur`s removal was followed a few days later by the resignation of two other directors, Chris le Sueur and chief financial officer (CFO) Keith Pitout.
The board says independent consultants Strategy Partners were appointed to assist caretaker CEO Mark Taylor to evaluate various alternatives for the company.
"The findings have highlighted the need to consolidate the business, restructure the role of the head office and further refine Intervid`s business model," it says.
Intervid is to be restructured into two separate businesses.
The first of these is a regional systems integrator, located in major global markets and specialising in electronic security and business process monitoring. The other is a technology business specialising in developing integrated solutions for electronic security and business process monitoring, as well as distributing proprietary hardware and software products.
Non-core assets are to be restructured or sold.
The group says Taylor is to continue as caretaker CEO with support from Strategy Partners. Wayne Jaggard has been appointed CFO.
Intervid has also published a cautionary notice saying it is in talks with principal loan creditor RFS Holdings regarding the possible restructure of the terms and conditions of a compulsorily convertible loan advanced to Intervid subsidiary Intervid International.
It also says the review of the group`s business found that the expected impact of lower sales will be worse than originally expected when it published a trading update in April.
"The business remains sound and the current restructuring process will ensure the group is positioned for a controlled and measured growth phase that will focus on cash flow generation and sustained profitability in the medium- to long-term."
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