One of the JSE’s longest-surviving technology companies has been placed into voluntary business rescue.
Ellies Holdings announced on Wednesday that the planned acquisition of Bundu Power, which it has hoped would put it on a firmer footing, has fallen through.
“The proposed acquisition was subject to debt funding by the company’s bankers and the approval of Ellies shareholders in general meeting by 31 January 2024,” it said in a statement to shareholders.
“Our bankers have advised that they will not fund the proposed transaction and thus the company advises that the conditions precedent will not be met and therefore the agreement in this regard will lapse and be of no further force or effect.”
The response from the market was swift: Ellies shares crashed 80%, from 5c to 1c – the lowest they can trade – immediately after the announcement.
Compounding matters is that Ellies will not publish its interim results for the six months ended 31 October 2023 in the time required under JSE listing regulations. It said it is still finalising the results, but did not say when they would be ready.
Business rescue
“In light of the above disclosures, the board of directors of Ellies has resolved that it would be in the best interest of the company to commence with voluntary business rescue proceedings in terms of section 129 of the Companies Act,” it said.
“Shareholders are advised to exercise caution when dealing in Ellies shares until such time as a further announcement is made in this regard.”
Read: Remembering Ellie Salkow, a pioneer in SA broadcasting
Ellies Electronics was founded in 1979 by the late Elliot (“Ellie”) Salkow, who passed away in 2021. He initially operated from his garage and sold aerials from the boot of his car. – © 2024 NewsCentral Media
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