OWN CORRESPONDENT, Johannesburg | Monday 2.20pm.
SHARES in Brainware extended last week’s slide after the troubled tech company brought more bad news to the market when it announced that a pending funds injection deal has fallen through.
By 11.30am, the counter had lost another 42% or three cents to hit a record low of four cents in brisk volume of 6,5-million shares. It fell 22% last week.
Earlier Brainware said that a previously announced transaction with private equity firm Rock-IT has not been implemented after certain conditions were not fulfilled. It did not say what those conditions are.
Rock-IT was due to provide a R10-million funding facility to Brainware. The deal was also aimed at bringing additional expertise and experience into the group to rebuild Brainware as a focused IT business.
The deal collapse news follows last week’s warning from Brainware that it will post a ”substantial loss” for its full financial year and that its founder and another director have quit. Its shares fell sharply after the announcement.
Brainware said that Rock-IT’s withdrawal from the deal has not resulted in any financial or other liability from Brainware. It also said that Christo Scholtz, who has been appointed as non-executive chairman of Brainware in terms of the transaction, has confirmed his willingness to remain in this position at least until Brainware’s next shareholders’ meeting. — Reuters