Takeover offer may breathe life into struggling Lyons

Posted On Wednesday, 17 September 2003 02:00 Published by eProp Commercial Property News
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A proposed takeover bid by Icarus Investment Corporation has thrown it a lifeline

Property-Housing-ResidentialAlthough listed investment holding company Lyons Financial Solutions Holdings reported an attributable loss of R45m for the financial year ended May 31 2003, casting doubt on its ability to continue as a going concern, a proposed takeover bid by Icarus Investment Corporation has thrown it a lifeline.

Operating executive director Des Magua, who joined Lyons after the review period, said Icarus Nominees, trading as Icarus Investment Corporation, had made an offer to Lyons to buy all the assets and liabilities, which the board accepted.

But they also reserved their right to change their offer to a Section 440K offer, which is basically an offer to buy out all minority shareholders.

"That's currently in progress and that should be completed towards the end of October," Magua said .

Garry Fromentin, who was ousted as CEO towards the end of last year, is the man behind Icarus Investment Corporation and has made the takeover bid.

Magua, who will stay on as operating executive director, said that if Icarus obtained sufficient shareholding they would delist Lyons. "Failing that they will continue as a listed entity with minority shareholding," he said.

"Currently we are subject to the 440K offer and we assume the board has no reason to believe anything to the contrary, that the offer will go through and as a result we will be recapitalised. That will take care of any imbalance in the assets and liabilities. That's obviously the prize that we're working towards," he said.

Independent auditors Deloitte & Touche said in their report that Lyons Financial Solutions Holdings, its main operating subsidiary, had incurred a net loss of R45m and that liabilities exceeded assets by R13m at the date of the audit.

The company reported attributable earnings of R12,3m last year. It also reported a headline loss of R28,8m compared with earnings of R185000 last year.

The report said that this indicated the "existence of a material uncertainty that may cast doubt on the ability of Lyons to continue as a going concern in the foreseeable future".

The company, which also has a 45% equity stake in the R400m property fund Lyons Corporate Lease Fund, reported that the year under review reflected a "turbulent period" in its history.

The company's gross revenue decreased substantially to R12,03m from R32,4m the previous year, which management attributed mainly to the closing down of the structured finance division and the downsizing of operations, which resulted in fewer deals being consummated.

The company said its rationalisation programme increased staff costs due to retrenchment packages paid.

 

 

Last modified on Friday, 09 May 2014 22:06

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