Beleaguered technology company GDC was forced to seek NZX approval to sell its iVASP ASP business without first asking for shareholder approval.
GDC sought a waiver to a rule that transactions involving the sale of assets worth more than 50% of a company’s market capitalisation must go to a shareholder meeting for approval.
GDC was granted the waiver on March 2 after the NZX agreed that the sale should be allowed to proceed because GDC’s market capitalisation had slipped from $7,716,280 in October to $1,122,268 on March 1.
The exchange ruled that given the March 1 market capitalisation was less than 20% of what it was in October, “the rule imposes an unreasonable restriction on the ability of GDC to realise assets”.
GDC then sold iVASP to Compass Communications for $850,000 in a deal that followed close on the sale of its voice services division to Cogent earlier this year for $1.3 million.
The remaining core asset for GDC is its field services division.
GDC’s shares were suspended from trading on the NZX earlier this month following its failure to file its annual results for last year by March 1.
In February, GDC’s directors announced that the company’s results for the year to December 31 were expected to be worse than a $1.7 million loss estimated in November.
The NZX noted earlier this month that GDC “was due to announce its preliminary year end results on February 28 but missed this deadline due to the recent resignation of its chief financial officer and loss of other accounting staff and the recent distractions associated with the sale of the voice business and the current sales processes underway regarding GDC’s other business divisions.”
GDC has scheduled a shareholder meeting next month to discuss the future direction of the company.
Late last year GDC made 27 Auckland-based staff redundant, a 25% reduction in its headcount in the region.
At the time, GDC managing director Ross Jenkins told Computerworld that changes in the voice services market, such as the arrival of IP telephony as a viable technology and the move into voice services by systems integrators contributed to the conditions that made the cuts necessary.
He also cited Telecom’s entry into that market as a factor, saying “Telecom management have changed their strategy in the [six months to December] and are now actively selling CPE [customer premises equipment] voice equipment.”