MGX now in full control of EC-Hold

By Bronwen Kausch for MGX Holdings

Johannesburg, 03 Aug 2001

In a strongly worded statement, MGX Holdings today informed shareholders it has taken steps to end the extended battle over its EC-Hold acquisition.

MGX has acquired EC-Hold shares at R1 each from the majority of the EC-Hold shareholders who brought the complaint to the Securities Regulation Panel (SRP) over the purchase price and EC-Hold management.

The purchase of the additional 41.6 million shares is full and final settlement for the acquisition of EC-Hold, which will now answer to MGX as a full subsidiary in both operations and management.

MGX CEO Chris Hills says MGX does not hold with the SRP`s decision that the Mandy Rebecca Price Trust and MGX, as concert parties, concluded what the SRP terms an "affected transaction" by acquiring EC-Hold shares before the announcement of MGX`s firm intention to make an offer to EC-Hold minority shareholders.

"We will not be paying the SRP an admission of guilt fine to make this all go away. MGX stands firm that it was never in error and if the SRP follows through and takes this to court, we will defend the action," says Hills.

He points out that although in terms of the JSE regulations MGX would have to make an offer to minority shareholders, its legal team believes the offer would only extend to those people who held EC-Hold shares before 8 October 1999.

The move leaves MGX and the Mandy Rebecca Price trust with a collective 88% holding in EC-Hold.

MGX concludes the statement by saying it intends to immediately reorganise the operations of EC-Hold in light of the current market conditions, and to focus on a speedy return to profitability. MGX adds that it believes the transaction and offer were both fair.