In a statement, Amsterdam, Holland-based Getronics said: Although Getronics is experiencing a very difficult market, the underlying fundamentals of the company are in better shape than originally thought. In particular, client loyalty has proved to be stronger than expected.
As a result, the company said it has received serious offers to acquire its Getronics Human Resources Solutions (GHRS) business, which generated revenue of 95m euros ($100.7m) and made earnings before interest, tax and amortization (EBITDA) of 35m euros ($37.1m) in 2002. This is expected to be complete in the coming months, and following further divestments of non-core assets, Getronics expects to put some 300m euros ($318m) raised towards repaying its debt, rather than simply raising capital through a debt-for-equity split.
The company said that it would also attempt to either liquidate or restructure under-performing operations, starting with its Italian subsidiary, which appointed former Texas Instruments executive Roberto Schisano as chairman on March 20 to turn around the operation.
The about-face comes after it emerged earlier this month that Getronics would face legal action from Dutch shareholder group VEB if it were to go ahead with its plan to raise funds to cut debt by exchanging convertible bonds for shares, a move that would reduce the amount of equity owned by ordinary shareholders from 43% to just 3.5%.
Getronics said a final decision on the new course of action will be taken at an extraordinary meeting on March 27, but will not involve a move to terminate the debt-for-equity split altogether, unless there are unforeseen or exceptional circumstances and provided that an acceptable level of exchange offers are tendered. Clearly, however, the sale of better-performing operations such as the profitable GHRS division, are likely to hit Getronics’ profitability further in 2003.
Source: Computerwire
