Capital Management Review - Capital Return

 

TIDMESG 
 
RNS Number : 9232U 
eServGlobal Limited 
25 October 2010 
 

 
 
CAPITAL MANAGEMENT REVIEW 
 
 
25 October 2010 
 
 
Background 
The 2010 financial year was dominated by the company undertaking a full 
operational demerger of the USP business and then subsequently entering into an 
agreement in May 2010 to sell that business to Oracle for AU$107 million.  The 
agreement provides that AU$23.6 million of the sale proceeds will be held in 
escrow for between 12 and 24 months.  The transaction was completed in early 
August 2010.  The company announced that subsequent to completion, the Board 
would undertake a capital management review in order to consider the extent to 
which the cash proceeds in relation to the transaction were excess to the 
company's ongoing requirements. 
 
Outcome of Review 
That review has now been completed, with the Board forming the opinion that a 
return of capital by way of capital reduction is in the best interests of the 
company and shareholders.  Accordingly, at the 2010 annual general meeting, 
shareholders will be asked to consider, and if they think fit, approve a 
resolution to reduce the capital of the company, which will involve a return of 
capital to all shareholders.  The implementation of the proposed capital 
reduction is also conditional on the company obtaining a satisfactory class 
ruling and private binding ruling from the Australian Taxation Office.  If 
satisfactory rulings are not obtained the proposed capital return will not 
proceed and other capital initiatives will be considered further by the Board. 
 
If these conditions are satisfied, all shareholders will receive a cash payment 
of $0.33 per share held on the specified record date, with approximately AU$65 
million being returned in aggregate to all shareholders. 
 
Further details are contained in the 2010 Annual General Meeting Notice of 
Meeting and Explanatory Memorandum which will be posted to shareholders and 
placed on the company's website shortly. 
 
 
ENDS 
 
eServGlobal Limited is listed on the Australian Securities Exchange (ASX: ESV) 
and the London Stock Exchange AIM market (LSE: ESG). More information can be 
found at: www.eservglobal.com 
 
+---------------------------------+---------------------------------+ 
| eServGlobal Limited             |            Tel: [phone] | 
+---------------------------------+---------------------------------+ 
| Jason Lilienstein               |            [e-mail] | 
+---------------------------------+---------------------------------+ 
| Company Secretary               |                                 | 
+---------------------------------+---------------------------------+ 
|                                 |                                 | 
+---------------------------------+---------------------------------+ 
| Altium (AIM)                    |                                 | 
+---------------------------------+---------------------------------+ 
| Nominated adviser, Paul Lines   |         Tel: [phone] | 
+---------------------------------+---------------------------------+ 
Corporate Broking, Chloe Ponsonby 
 
 
 
 
This information is provided by RNS 
            The company news service from the London Stock Exchange 
   END 
 
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