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Johannesburg - After a resilient push to have subsidiary Labat Traffic Solution (LTS) unbundled from its listed parent company, Labat CE Brian Van Rooyen has finally been granted his wish.
Finweek had earlier in the year speculated that Labat was in discussions with empowerment group Mvelaphanda with a view to unbundling LTS from its parent company and then separately floating it on the AltX.
LTS is Labat's unlisted, cash-positive subsidiary that generates and processes traffic data like traffic fines on behalf of municipalities.
Its performance, however, has largely been weighed down by cash-guzzling sister company South African Micro-Electronic Systems (Sames).
Sames has battled to generate profits and has been a management disaster ever since it was acquired from the Industrial Development Corporation (IDC) for R6m in the late 90s.
Barring any last-minute glitches, LTS - in an empowerment deal that's brought Mvelaphanda into the frame as a strategic partner - will on November 28 list on the AltX under the name Total Client Services (TCS).
TCS is the name of LTS' operating subsidiary, of which LTS owns 51%.
Since buying its stake in TCS, LTS has also been able to offer its clients a fully comprehensive back-office administrative function and a number of payment methods whereby traffic fines can be settled via various electronic channels, directly to the issuing authority, resulting in an end-to-end solution for LTS clients, the company explained in a statement.
The move will subsequently lead to the de-listing of Labat.
LTS will buy the 49% of the ordinary issued shares in TCS it doesn't already own from Jacobus Hermanus Taljaard and the Birkholtz Family Trust. Brian Birkholtz (the founder, a trustee and a beneficiary of the Birkholtz Family Trust) and Taljaard are both directors of TCS.
In lieu of the payment by LTS Taljaard and the Birkholtz Family Trust, both will subscribe for shares in LTS that will equate to 23% of the total issued ordinary share capital in LTS.
Parties to the acquisition have agreed that all dividends in respect of the profits of TCS for the year to end-February 2007 - R6 772 000 - and an interim dividend of R11 228 000 for the 2008 financial year will be declared by 1 November 2007, and then paid.
Van Rooyen could not be reached for comment.
- Fin24