Cantono is selling its data centre business for £4.85m.
The announcement came just before the close of trading and the shares rose 0.25p to 3.5p each, valuing Cantono at £1.05m.
Cantono does not have the cash to develop the business. The purchaser is SSE Telecommunications, which will also take on some of the business’ liabilities.
The cash from the disposal will be used to pay off the company’s loan notes - £2.34m have been drawn down. There is no interest charge but there is a redemption premium of 200% on top of the principal if the loan notes are repaid within 12 months.
However, the loan note holders have agreed to not to redeem them in full so that Cantono can pursue litigation against Xploite, which has not paid the deferred consideration for Cantono‘s former IT managed services business. Xpolite should have paid £1.1m on 15 March 2009 but it has not been paid.
Once this litigation is completed the loan note holders will receive their cash first and shareholders will have what is left when the company is wound up.
© 2021 Aim Micro. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.