South African Internet company E-data Holdings moved quickly on Thursday to dispel rumours that the company was in troubled financial waters.
James Stride, E-data CEO and Chairman, told ITWeb the deal with US E*trade and Brait securities was on track and the company was in a position to meet all its obligations.
E-data is in the throws of consummating a deal involving the purchase of Brait Securities for R20 million to form a joint venture with US online stockbrokers E*Trade. A licence fee of $3 million has to be paid by E-data to E*Trade in order for the local operation to proceed.
Offices in Rosebank, Johannesburg, have been prepared for the E*Trade Africa operation and software development of the site is close to completion. However the deal has not yet been finalised.
E-data this week closed its Stellenbosch offices where the new company`s software has been developed. These developments lead to the resignation of a director of E-data Trading Solutions, Sean Riley, who has left to begin his own business.
Stride has dismissed any talk (rumours) that E-data was facing financial difficulty. "E-data is solvent and liquid and we have raised the capital to close the deal," says Stride.
"We will be issuing a cautionary on Friday, which we hope to have resolved along with the announcing of our interims on Wednesday next week," says Stride.
"All the 28 Stellenbosch staff have been offered jobs in Johannesburg," he says. "I am not sure how many will take the offer. In terms of the labour relations act, those staff who do not take up our offer will be given retrenchment packages."
He says the consolidation of the offices will mean management will have more control over business developments.
Mark Barnes, Brait Merchant Bank Chairman, said he was not in a position to comment as the company was in ongoing negotiations with E-data.
E-data share prices hit a low of 20 cents to close at 68 cents on Thursday. The previous 12 month low was 25 cents on 17 March. The share reached a 12 month high of 530 cents on 14 May 1999.
For the six months ended June 1999, E-data posted a turnover of R6.144 million, a headline earnings per share of 4.2 cents and attributable earnings of R1.274 million.
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