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Elexir in bid to cut debt

By Iain Scott, ITWeb group consulting editor
Johannesburg, 07 Oct 2004

Elexir has announced plans to reduce its debt, which include the sale of non-core property and the conversion of some of its debt into equity.

The first transaction involves the disposal of the property owned by subsidiary Pitstop Properties for cash of R2.89 million. The buyer of the property, a 2 307m2 freehold stand in Kyalami Park, Gauteng, is Brookfield Investments 187.

"The property is a non-core asset and was sold to enable Elexir to use the proceeds to repay debt," the group says.

Elexir is also issuing 60 million shares at 3.5c each to settle the debt owed to TV Homewatch. It is also issuing an additional 20 million shares at the same price to corporate advisor SME Corporate Solutions, for structuring and negotiating the deal.

"The reason for the restructuring transaction is to reduce the significant levels of debt of the company, thereby substantially improving the Elexir balance."

The group has also proposed increasing its authorised ordinary share capital from R2 million (divided into 200 million shares of 1c each) to R5 million (divided into 500 million shares of 1c each).

"The increase in the authorised ordinary share capital of Elexir will facilitate the issue of shares for the restructuring transaction and the funding of future transactions beneficial to the company," it says.

It also proposes to change its financial year-end from 31 August to 28 February to bring it in line with the company`s business cycle.

The deals are subject to shareholder and regulatory approval. Shareholders owning 47.87% of the issued share capital have given irrevocable undertakings to vote in favour of the disposal of the property at the required general meeting.

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