Zintel sells Commit for $1.13m before vote on winding up
BUSINESSDESK: Zintel Group has sold its Commit Services unit for $1.13 million, announcing the disposal of its last operating unit ahead of a shareholder vote tomorrow on winding up the company.
Shares of Commit were sold to an unrelated private investor, the company says. That leaves Zintel with one business, Zintel Payments, which is in a legal dispute and does not operate.
Shareholders meet in Auckland tomorrow for their annual meeting, where they will vote on delisting the company from the NZX and amend the constitution to allow the board to appoint liquidators.
The company abandoned its growth strategy when US companies Verifone and Hypercom merged, with the result that Verifone terminated Zintel's exclusive distribution agreement, dealing a "devastating" blow to the New Zealand's firm's Eftpos business. Zintel is suing Verifone.
The other development was the sale of its Australian toll-free calling business for $15.3 million to Delaware-based j2 Global, more than the Auckland-based company's entire market value at the time. Zintel shares last traded at 43 cents, having soared almost 200% in the past 12 months, valuing the company at $19.7 million.
The company made a distribution of 20 cents a share via a special dividend and buyback earlier this year and in the notice for the AGM said it has cash reserves in excess of $19 million, or about 43 cents a share.
The sale of Commit was one of the last pieces of the process prior to tomorrow's vote.
"Having made the strategic decision to pursue a winding up, the board considers that the most effective method to distribute further funds to shareholders is to delist and/or liquidate the company," chairman Nick Brown said in the notice of meeting.