Westcon Group, JSE-listed Datatec`s largest subsidiary, has arranged $190 million of debt financing for its North American operations.
The financing consists of a $150 million working capital facility and a $40 million second lien term loan.
Datatec financial director David Pfaff says Westcon Group, which is Datatec`s distribution division, will use the working capital facility to finance its three US operations (Comstor, Voda One and Westcon) and its Canadian business.
The second lien term loan is to provide extra long-term capital to fund Westcon`s growth and repay debts owed to Datatec.
Westcon`s figures showed a significant improvement in the six months to August 2005. The US operations performed well, but Europe continued to be problematic.
Datatec CEO Jens Montanana said towards the end of last year that the challenges in the European operations were being addressed through the appointment of former Nortel executive Barry Shakespeare as GM for the region.
Westcon, Montanana said at the release of the group`s interim results, accounted for 20% of Cisco`s worldwide distribution business.
The subsidiary grew revenue 8% to $1.1 billion, that growth outstripping that of its major vendors - Cisco, Nortel, Avaya, Nokia and Checkpoint. Pretax income of $23 million for the period compares with a year-earlier figure of $2 million.
Datatec`s total revenue for the period amounted to $1.44 billion, while the group achieved an attributable profit of $13.58 million.
The Datatec share was untraded at 2 050c on the JSE this morning. Yesterday the share closed up 15c or 0.7% on Monday`s closing price of 2 035c. It touched an intraday high of 2 150c yesterday.
Related story:
Datatec may pay dividend
Share
