Integrated Technology Holdings (Itech) says it plans to de-list from the JSE as soon as possible. The company has had a rough ride since its early 1998 listing, falling from a one-time high of close to 300c to its present level of around 30c.
CEO Dirk Odendaal says minority shareholders have already indicated their support for the unusual move and he expects the share to be suspended by the end of February.
"We didn`t wake up yesterday and say 'let`s de-list`. We have gone through a process you would not believe." He says company management looked at several other options, including selling assets to distribute cash to shareholders and merging with another company. "We decided this [the de-listing] is the best option."
Minority shareholders, who own almost 35% of the company, will have the option of selling their shares at 30c or exchanging them for shares in the private entity. The company has undertaken not to go ahead with the scheme unless 75% of minority shareholders agree to it.
Integrated Health Technologies became Integrated Technology Holdings in August last year, after channelling its health assets into a joint venture with IQ Health. It moved to the main JSE board at the same time.
Odendaal classifies his company as sub-micro cap. "We are so small that I honestly believe we are not, in the short-term, on anybody`s radar screen." The size of the company also means the costs of maintaining a listing takes up a significant portion of the profits made, he says. "There is a financial burden, but the overhead is not just financial." He says much of management`s time is spent on duties demanded of a listed entity.
With the company privately held, it hopes to divert funds previously used to maintain the listing to more profitable business areas.
"Do we know this is the right thing to do?" Odendaal asks. "Of course not. But we took the decision and we will live with the consequences."
Although weary of the Companies Act, Itech is looking at a mechanism to make trading in the private shares easier. Odendaal says an Internet site where buyers and sellers can come together would be considered.
Although disappointed at the performance of the company`s share price, Odendaal still believes the initial listing was the right move, and he says the company will go back to the JSE if conditions warrant it. "We would not be where we are if we had not listed," he says, although he admits that the move was na"ive. "We derived all the benefits from the listing at first, but it later dried up."
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