MGX Holdings, which is to seek to delist from the JSE, says the costs of being listed last year exceeded its entire market capitalisation.
"A cash offer to shareholders will be made at a nominal level, in line with the current estimated value of the ordinary shares, but shareholders will be able to remain invested if they wish," says chief financial officer Roy Midlane.
The group, in the process of disposing of all of its businesses except Metrofile, incurred a headline loss of 73.3c a share for the six months to December. This compares with a year-earlier loss of 254c a share.
However, Midlane says the year-on-year results are not strictly comparable because of the sale of businesses and assets that have already taken place.
"Nevertheless it is pleasing to note the improved EBITDA (earnings before interest, tax, depreciation and amortisation) and the reduction in losses per share," he says.
EBITDA improved from a loss of R13.2 million to a positive figure of R22.37 million. Revenue was down to R293.24 million from R668.84 million.
Although current liabilities of R212.05 million exceed current assets of R105.16 million, Midlane says the board is of the opinion that the group is a going concern for various reasons.
He says the fair value of assets exceeds the fair value of liabilities if subordinated liabilities are excluded from the balance sheet.
Earlier this year creditors agreed to a compromise that saw them accept convertible loan notes in settlement of their claims against the company.
Thanks to working capital facilities made available by a consortium of bankers, the current budget indicates that MGX has enough working capital to support its operational requirements and all service costs associated with its restructuring, he says.
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