Beget Holdings` shareholders have approved unanimously the issue of 200 million share options to private equity advisor Beacham Capital over the next four years.
The group has been struggling with operational and cash-flow difficulties since it listed on the JSE in 2002 and says this deal is a step towards its recovery.
Beacham Capital has undertaken to exercise the first 40 million options before the end of August at 3c a share, amounting to R1.2 million for Beget.
Beget CEO Andre Potgieter says the group has streamlined its product offering on specialist GPRS technology, which allows for transmission of data via the cellphone network at a fraction of the cost of landline telephony.
He adds that the global launch of the GPRS-enabled devices last year means Beget is seeing a return on the "cash-poor research and development phase", with the 2005 order book looking healthy.
He says Beacham approached the group last year, committing R1.1 million of its own funds for the roll-out of second-generation MobileBIO units, thus rescuing Beget from "a difficult predicament". MobileBIO is an intelligent biometric identity and access device.
"We were not entitled to draw down on funding from the Industrial Development Corporation to manufacture MobileBIO units without significant customer orders, and we were unable to secure these customer orders without sending initial test units," Potgieter adds.
Beacham also arranged a trade facility for Beget to import MobilePOS units from Korea.
With the group`s interim period ending this month, Potgieter says the early popularity of Beget`s GPRS devices bodes well for growth. The rand`s weakness also benefits the group thanks to international sales.
However, Potgieter says that should the rand strengthen again, growing local demand for the group`s products will offset any decline in exports.
The Beget share closed at 8c on the JSE`s venture capital board yesterday, down 1c or 11.1% on the previous close.
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