Datatec today announced that agreement has been reached in principle for the disposal of its 76% interest in UUNET SA (Proprietary) Limited to WorldCom Inc.
Datatec further advised shareholders to exercise caution when dealing in their shares because the transaction is subject to the finalisation of formal agreements and the approval of the South African Reserve Bank, the South African Competition Commission and other relevant regulatory bodies.
Datatec`s board representative on the UUNET SA board, Mendel Karpul, says the agreement represents a major step forward as the provider of corporate network and Internet services positions itself for telecommunications deregulation.
"In our interim results announcement last week, Datatec announced its intention to list UUNET SA and indicated that the business may be sold at some point in the future. I am pleased to say that we have reached a breakthrough in our protracted negotiations with WorldCom and are now in a position to announce the sale," says Karpul.
Jens Montanana, Executive Chairman of Datatec says: "We have indicated during the past two reporting periods that we intended to sell or list our stake in UUNET SA so as to realize the full value for our shareholders of this business.
"While it has taken a long period of negotiation to come to fruition, the resolution of this deal at this time will be equally good for UUNET SA and Datatec. On the one hand it will wholly align the business with WorldCom Inc, the global parent company for which Internet Service Provision is a core competence. On the other hand, it will contribute directly to streamlining Datatec`s globally focused networking distribution and e-services operations and eliminate the Group`s net borrowings, providing us with cash resources to pursue and settle acquisitions."
"The sale of UUNET SA should be seen as the first step in our plan to allow the full value of every operating entity in the Group to be reflected through its listing, sale or realignment. We look forward to the next step in our plan - the forthcoming Westcon Group listing."
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