Connecting to LinkedIn...

Blank

Networkers International plc Joint Venture Agreement

Networkers International plc Joint Venture Agreement

The Group has announced that it has reached an agreement with its Joint Venture (JV) partner for the JV partner to purchase Networkers' stake in the JV business for a total cash consideration of US$4.2m (approximately $3.5m net of foreign taxes). The JV was set up in 2001 as a resource and project service provider within the telecommunications and IT sector, originally operating in Saudi Arabia but successfully establishing itself in Iran, UAE, Pakistan and Algeria. Completion is conditional upon the approval of the Saudi Arabian authorities which is expected to occur within the next two months.

Commenting on today's announcement, Spencer Manuel, CEO said "The joint venture partnership has proved an extremely successful experience for the Group. The disposal allows both parties to focus on further international expansion in their respective geographical markets. During the 8 years of the partnership we have built up a very strong relationship with our JV partners, Saudi Telecoms Systems Limited, and I am pleased to announce that our 50:50 partnership located in Dubai, to provide recruitment services in the Middle East (excluding Saudi Arabia, Iran and Algeria) remains in place."

"When the full proceeds are received by the Group they will be used to further reduce our net debt position which, even before accounting for the JV disposal, has been reduced to 8m (of which 2m relates to invoice discounting) from 20.7m in December 2006 when the debt was taken on to make the successful MSB acquisition."

The JV contributed 240,000 to the Groups pre tax profit for the 6 month period to 30 June 2008, at which point it was reclassified as an investment held for resale and no additional profit has been attributed to the Group. As at 31 December 2008 the Group's share of the JV's net assets represented 1.7m indicating a post tax profit on disposal of approximately 450,000.

The Group's cash investment in the JV totalled 122,000.

Tags:

Articles similar to

Articles similar to