Standard Bank of SA has made an urgent application for the liquidation of beleaguered JSE-listed Infiniti Technologies.
Infiniti chairman Roger Davids says papers were served on Infiniti early this morning (Monday), and these were immediately handed over to Infiniti`s legal team.
Davids says once senior counsel has been briefed, affidavits will be taken from all relevant parties and a court hearing will take place later in the week.
A Standard Bank official says the application was made in a bid to recover money owing to it, although the amount involved is "not significant by any means".
He says the application was made in response to last week`s action by Nedcor, which recalled the company`s overdraft. As far as Standard is aware, Infiniti`s companies have ceased trading.
The overdraft has been reported to be at least R37 million.
An analyst who has been following the company`s progress says Infiniti`s demise has been on the cards since April. Infiniti`s interim results, released in May, reflected a 40% drop in its operating profit and a 53% fall in headline earnings.
The analyst also raised serious doubts as to the strength of management and pointed to a lack of fiscal discipline. Infiniti acknowledged in its interim release that acquisitions made using interest-bearing debt rather than equity were largely responsible for its cash-strapped position.
A court order was granted last week permitting a creditor to have subsidiary FSA Distribution liquidated. Inifiniti directors said in a statement this made it impossible for the group to repay its overdraft and prevented it from trading.
Infiniti`s share was suspended on 6 December at the request of its directors, after announcing the previous week that an Infiniti financier had exercised his rights of a pledge and cession of the shares of a subsidiary, in terms of an agreement regarding an overdue loan.
Infiniti directors had been trying to reschedule the terms of the loan repayment.
The share was trading at 8c at the time of its suspension, having fallen from 186c at the start of the year. Its highest close was 250c, reached in November last year.
The company had sold several subsidiaries after announcing a restructuring in July. Its 10 subsidiaries had been whittled down to two and 80 jobs had been cut.
Infiniti has been labouring under the burden of heavy debt levels. Liabilities at the interim stage in February totalled R56 million, while interest-bearing debt was at R37 million.
Turnover for the period had risen 36% to R234.7 million, but operating profit fell almost 40% to R6.4 million. At the time, CEO Mike Roussos forecast earnings per share of 8c for the full year, compared with 12.19c the previous year.
However, more recently the company was predicting poor year-end results.
Infiniti said recently it was having difficulty selling distribution division FSA to Drive Control for R30 million. The price had been touted as key to solving its immediate cash-flow problems.
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