Prism has sold the majority shareholding of subsidiary Tinderbox to the media company`s management for an undisclosed sum.
Duncan Todd, Prism`s corporate strategy director, says Prism will retain a minority shareholding in Tinderbox in line with its continued interest in the Internet channel as an opportunity for its own products and services in the secure payment arena.
"The deal is cash and earnings neutral to Prism, but reduces the number of people employed in non-core activities. We intend to maintain and grow our close working relationship with Tinderbox management over time," he adds.
According to Todd, the deal has satisfied Prism`s intent to focus its energies on core products and services while it provides Tinderbox with the flexibility, creative freedom and opportunity it requires to "stretch its wings in the communications and media industry".
Prism recently bore the brunt of market speculation regarding its ability to sustain growth and its share price nose-dived in late October to 70c.
In response to the share movement, Prism management announced to shareholders an extensive plan which would get it back into a strong cash position and reduce its exposure to non-core business activities.
Part of the plan was to sell of some of it e-business subsidiaries as well as Tinderbox. In addition, earlier this month Prism announced that its original backer - Archway Venture Partners - has backed its rights issue, planned for January, to the tune of R55 million.
Todd says the issue will have a diluent effect as an additional 100 million shares will be floated and as a result earnings will be flat for the year. However, he points out that Prism management has invested R10 million of its own money into the issue, proving its commitment to the continued growth of the company.
Prism`s restructuring plans, as well as its strong foreign currency earnings in conjunction with the weak rand, have seen its share price recover, swapping hands at 95c early today.
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