RTS NetWorks Group PLC
11 December 2001
RTS NETWORKS GROUP PLC
('RTS Networks' or 'the Company')
Disposal of RTSE Finland Oy ('RTSE Finland')
RTS Networks today announces that it has reached agreement for the disposal
(the 'Disposal') of RTSE Finland, its subsidiary based in Helsinki, Finland,
to Antti Raunio, a former employee of the Company. RTSE Finland has
specialised in development work for RTS Networks together with web design and
mobile solutions. Completion of the Disposal took place on 10 December 2001.
Following the Disposal, RTS Networks will retain the worldwide Intellectual
Property Rights other than in Finland and the Company will also receive 35 per
cent. of any consideration received for the sale of part or all of the
business or the shares of the Company for the next two years.
The total consideration is a nominal sum of £1. Under UK Accounting Standards,
the intercompany loans of £1,150,000 must be written off following the
Disposal to the profit and loss account of RTS Networks' consolidated accounts
for the year ended 31 December 2001. The purchased goodwill has been fully
amortised at 30 June 2001.
RTSE Finland has been loss making since its formation in 1999 and the
Directors consider that it requires considerable further funds to reach
breakeven. The Directors of RTS Networks, having considered the total cash
reserves of the Company, consider that the Disposal is the most effective way
of concentrating resources on the most successful areas of the business. In
the 12 months ended 31 December 2000, which were the last audited results,
RTSE Finland had revenues of FIM 17,273,390 (approximately £1.81 million) and
made a net loss of FIM 22,843,524 (approximately £2.39 million). The net
assets at that date were FIM 15,502,550 (approximately £1.62 million).
Some 1,078,000 share options over shares in RTS Networks (the 'Options') will
lapse as a result of the Disposal. These Options have an average exercise
price of 66.7 pence.
Mr Raunio is a current director of RTSE UK Limited, a subsidiary of the
Company. Due to his interests in the transaction, the Disposal constitutes a
related party transaction pursuant to paragraph 12 of the AIM Rules. In the
opinion of the Directors of RTS Networks, having consulted with the Company's
nominated adviser, Brown, Shipley & Co. Limited, the terms of the Disposal are
fair and reasonable so far as RTS Networks shareholders are concerned.
11 December 2001
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