Zintel settles with VeriFone, cash in bank more than $22m
BUSINESSDESK: Zintel Group has reached an amicable settlement with VeriFone that was sparked by the loss of its exclusive deal with the US company.
News of the settlement comes in time for Zintel's annual meeting in Auckland today, where shareholders are voting on delisting and liquidating the company.
Zintel yesterday announced the sale of its Commit Services unit for $1.13 million, the last operating unit to be disposed of. The proceeds of that and the settlement with VeriFone will bring cash in bank to more than $22 million, the company says.
"Zintel is pleased to advise it has reached an amicable settlement with VeriFone Australia (HAPL), with regard the termination of its distribution agreement for payment terminals in New Zealand.
"While the terms of the agreement are confidential, Zintel anticipates that by early November once it has received settlement funds and together with the sale of Commit Services Ltd, cash in bank will be in excess of $22 million, with all subsidiaries either sold or no longer trading," it says.
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.
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.
It made a distribution of 20 cents a share via a special dividend and buyback earlier this year.