Labat Africa has decided not to proceed with the rights issue mooted earlier this year.
The rights issue was brought up at the release of the group`s results for the year to February. At the same time, the group announced it was in talks to sell the retail business to eliminate most of Labat`s debt.
The February results were the worst in the group`s history, with its first trading loss resulting from a downturn in the semiconductor industry and the strength of the rand.
CEO Brian van Rooyen said in May, at the release of the results, that although the retail industry had performed strongly, Labat Retail was not a match with the rest of the group`s operations, which are technology-related.
Labat issued a further cautionary notice last night saying the board has been considering various restructuring alternatives leading to the disposal of the retail business.
"However, in light of the alternatives which may result in the disposal of certain other non-core Labat group assets, the board believes it is no longer appropriate to proceed with a rights offer at this time," it says.
The Labat share was trading unchanged at 18c on the JSE this morning.
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