Loqus Holdings plc - Acquisitions and Restructuring Plan

Datatrak Holdings plc announced on 22 January that its Directors approved a business restructuring plan for the Group and a new strategy which should see the Group shift its prime focus to the provision of IT Services and solutions. These two areas of the Group’s business have been successful over the past few years and the Directors believe these are strong growth areas in the future. Following a number of years experience in their attempt to develop and sell Datatrak networks in foreign jurisdictions, the Directors are of the view, based on the developments that have been made in tracking technology, that the focus of the Group should shift from the sale of networks to the sale of IT systems and solutions connected to the tracking industry, which is far less capital intensive.

The restructuring plan will be recommended by the Directors to shareholders during an Extraordinary General Meeting scheduled to be held during last week of February. The plan consists of the acquisition of the full benefit of the business of Datatrak IT Services Limited (DITSL) and Datatrak Solutions Limited (DSOL) and the impairment of the investment in Datatrak Systems Limited (DSL) and Datatrak Mena Limited (DML). The total impairment provision expected to be taken is estimated to amount to €5.6 million and should be absorbed in full by its special reserve.

Datatrak Holdings plc already owns a 50 per cent equity stake in DITSL and DSOL. The consideration due by the Group for the acquisition of the incremental 50% interest will be settled through the allotment of 15,949,500 ordinary shares of a nominal value of €0.23294 per share at a price of €0.30 per share. The new shares will be allotted to Joe Fenech Conti and will result in an increase in the issued share capital of €3,715,276 and an increase in its share premium account of €1,069,574. The Directors noted that the value of €4,784,850 falls within the range of values attributable to the acquired businesses in an independent professional valuation report.

The Directors noted that the removal of all accumulated losses and these two acquisitions should enable the Group to begin distributing dividends to shareholders in the near future.

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