Cyberhost has disposed of its dial-up services to M-Web in a deal that will allow Cyberhost to focus on its cyber kiosks and Internet services.
The disposal will give M-Web access to Cyberhost`s full subscriber base as well as dial-up trade name, logo, design, brands, marks, marketing rights and related computer equipment.
Just 10 days ago, M-Web announced its intention to grow its dial-up subscriber base even though it would incur substantial losses.
Cyberhost says the division was sold because there is a relatively small domestic market that is fiercely competitive. Resources from the deal will be used to grow its cyber kiosks and Internet services.
The purchase price will depend on the number of dial-up subscribers at the effective date of 1 March 2000, but estimates are in the region of R1.69 million, payable in cash.
The company says the major benefit of the deal will be a reduction in current losses in the dial-up division and partial recovery of losses incurred to date.
Based on interim results for the seven months ending 30 June, the division has incurred a pre-tax loss of R2.86 million and has assets with a book value of R1.78 million.
Cyberhost`s share price closed on the JSE yesterday at 13c.
Share