PSG Online has acquired the majority of floundering listed company World Educational Technologies (WenTech), which will become a cash shell as soon as it finds a buyer for its one remaining asset, networking division Computer Crisis Centre.
PSG will pay R7.5 million in cash for all the software, trademarks, copyrights and subscriber databases as well as all equipment owned by WenTech. A WenTech employee has told ITWeb that the majority of employees will join PSG. Retrenchments at the company saw less than 20 employees remaining.
The WenTech share price, which peaked at 185c in late 1998 shortly after its listing, has never traded above 35c this year. Over the weekend it saw a new low at 6c.
WenTech names difficult trading conditions and a lack of critical mass as reasons for the disposal.
Cracks started to show in the company`s plan to offer investor information and financial education when the acquisition of Legacy Merchant was called off due to a weak share price. The loss of the R400 million deal in late 1998 saw many investors lose faith in the entity. Restructuring plans this year did little to restore that confidence and the company never regained its footing.
An earlier agreement would have seen WenTech acquire PSG Online for R133.5 million, in effect a reverse listing for PSG. Shareholders, however, decided against a listing and a new deal structure had to be devised.
PSG Online is an online brokerage that provides services on a fixed fee basis.
The deal is subject to shareholder approval.
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