Just a day after announcing the sale of subsidiary FSA Distribution for R30 million, Infiniti has announced the management buy-out of another subsidiary.
Network Solutions, previously a Pin-Point Holdings company, which is itself 100% owned by Infiniti, has been bought by its management for an as yet undisclosed sum. The company will be renamed G&E Network Solutions and continue business as usual, MD George Smit says.
Network Solutions provides peripheral infrastructure services, such as computer room installations and lightning protection.
Network Solutions was, like FSA, apparently making money for the parent. But like FSA it falls outside the core business and has been liquidated as part of the Infiniti restructuring announced in July.
Smit, however, admits that the impetus behind the deal came from Network Solutions, which was finding its association with Infiniti was impeding its business. Everyone looked forward to a bright future when Pin-Point joined the fledgling company, he says, "but the picture changed soon after. While we were doing well, other divisions in the group were struggling."
The Infiniti share price has seen its steady decline level out during September to stabilise on 10c. Less than a year ago the share sold for as much as R2.50. After a successful listing in February 1998, chairman Rasheed Hargey told ITWeb that the company would aspire to grow to the size of PQ Africa and Dimension Data. Hargey resigned his post in August this year.
Pin-Point group chairman Paul Blakey says one or two more companies in his group are under review for disposal, and he believes at least two more in the Infiniti group are being looked at. This could not be confirmed with Infiniti.
Blakey also says the buy-out includes a service level agreement, whereby Network Solutions will continue to supply Pin-Point with services.
Smit says G&E will not miss the cash resources of its bigger parent. "We have been having one of our best years ever," he says, "and our main customers have said they will stick with us as long as we can provide the services."
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