Teliti International Ltd Proposed disposal of Teliti Datacentres (3244R)

TIDMTEL

RNS Number : 3244R

Teliti International Ltd

24 October 2013

Teliti International Limited

("Teliti" or the "Company")

Proposed disposal of Teliti Datacentres

The Company announces that it has today signed a conditional share purchase agreement ("SPA") with Noah Ventures Sdn Bhd ("Noah") relating to the sale of its entire interest in Teliti Datacentres Sdn Bhd ("Teliti Datacentres") for a total cash consideration of RM15,000,001 (the "Sale").

Background to the Sale

At the time of the Company's admission to trading on AIM on 3 November 2011, its strategy was for Teliti Datacentres, its wholly-owned subsidiary, to complete the construction of a state-of-the-art datacentre in Malaysia, which would enable the Company's group ("Group") to offer co-location hosting services and cloud-based computing services. The latter would draw on the expertise inherent within its two operating divisions, Teliti Solutions and Teliti Services (operated by Teliti Solutions Sdn Bhd and Teliti Services Sdn Bhd respectively), which would also continue to grow their own business with departments of the Malaysian Government and other clients.

However, the construction of the datacentre by Teliti Datacentres has been beset by a number of problems with the result that, over 18 months after its intended completion date, it remains unfinished.

The delays to the datacentre, which have been announced to the market over the last 16 months, have led to a significant increase in costs from the additional interest accrued during the elongated construction time. At the same time, the delay in commencing operations has adversely impacted the Group's ability to increase its revenue base. The combined consequences have been to seriously constrain the Group's cash flows.

As announced on 21 June 2013, the Board was unable to secure the necessary funding to enable the datacentre to be completed this year and, instead, has had to seek a buyer for the project in order to limit the adverse impact on the rest of the Group of the RM111,506,741 debt burden of Teliti Datacentres.

As a result, the Directors have agreed to dispose of Teliti Datacentres to preserve the value of Teliti Solutions and Teliti Services. Noah, being associated with the main contractor for the construction of the datacentre, will conditionally acquire Teliti Datacentres, together with all its outstanding debt, with a view to completing the construction work of the datacentre.

Sale Details

The total cash consideration for the Sale is RM15,000,001, payable in three tranches. The first payment of RM6,000,000.40 is payable within sixty days from the issuance of a bank guarantee from Affin Bank Berhad ("Affin Bank") to Noah ("First Payment Date"). Assuming that the conditions detailed below are satisfied, the issuance of the bank guarantee is expected to follow within a month of the Company's general meeting mentioned below. The second payment of RM4,500000.30 is payable within six months from the First Payment Date ("Second Payment Date") and the third payment of RM4,500000.30 is payable within six months of the Second Payment Date.

The Sale is conditional upon, inter alia, the following:

(i) Noah being satisfied with the results of the legal, financial and operational due diligence exercises on Teliti Datacentres;

   (ii)        the approval of both Teliti and Teliti Computers Sdn Bhd shareholders; and

(iii) Affin Bank confirming in writing that it agrees to the Sale and that it will continue to provide funding to Teliti Datacentres under the new ownership of Noah.

Current Trading and Outlook

Both Teliti Services and Teliti Solutions remain profitable and active in the private and public sectors across a range of industries such as finance, energy, telecommunications and public service. A full trading statement will be issued with the circular to shareholders in respect of the Sale.

The Company will remain publicly listed on AIM and continue to focus on the performance of Teliti Services and Teliti Solutions. Whilst the Group is proposing to move away from ownership of datacentres, it remains open to providing datacentre services such as cloud computing and associated ancillary services.

Circular to Shareholders

As highlighted above, the proposed Sale is subject to the satisfaction of certain conditions, including Teliti shareholder approval.

In accordance with AIM Rule 15, a circular will be posted to Teliti shareholders in the near future that shall contain a notice of general meeting and further details of the proposed Sale.

 
 Teliti International Ltd 
---------------------------------------  -------------------- 
 Hj Mohamed Nasir Abdul Majid, Chief 
  Executive Officer 
  Rosmida Din, Chief Financial Officer    +603 7873 7733 
---------------------------------------  -------------------- 
 
 Daniel Stewart and Company plc 
---------------------------------------  -------------------- 
 Antony Legge, Ciaran Walsh               +44 (0)20 7776 6550 
---------------------------------------  -------------------- 
 
 Luther Pendragon Ltd 
---------------------------------------  -------------------- 
 Harry Chathli, Claire Norbury            +44 (0)20 7618 9100 
---------------------------------------  --------------------

This information is provided by RNS

The company news service from the London Stock Exchange

END

DISLLFEIISLSFIV

Teliti (LSE:TEL)
Historical Stock Chart
From Oct 2024 to Nov 2024