News:
biz.yahoo.com
Sunday September 19, 6:55 pm Eastern Time
Company Press Release
Olicom Announces that the Book Value of its Equity will be Close to Zero Following the Announced Disposals
Olicom Expects to Sell its Shares in Digianswer at a Substantial Premium to Book Value
COPENHAGEN, Denmark & DALLAS--(BUSINESS WIRE)--Sept. 19, 1999-- Olicom A/S (``the Company') (Nasdaq NMS: OLCMF - news), has previously announced the sale of its Token-Ring business to Madge Networks, and its intention to dispose of other activities. The Company today announces its intention to dispose of its majority holding in Digianswer A/S, and, in a separate press release, the signing of a definitive agreement under which Intel will employ Olicom's development group and purchase intellectual property and certain assets associated with that group.
During 1999, Olicom's Token-Ring business has been hit by a dramatic and accelerating decline in sales. As a consequence, the Company has incurred severe operating losses. On a continuing basis during the period, Olicom has reviewed its strategic and financial position, and the significantly increased competitive situation in the Fast Ethernet market. The Company has investigated a broad spectrum of possibilities including entering into strategic alliances focussed on Fast Ethernet technology and the sale of Olicom to a third party. Since these efforts have been fruitless, and in order to avoid a very critical financial situation, the Company decided to dispose of its assets and activities one by one.
Although the transactions with Intel and Madge have contributed to improve Olicom's cash position, very significant operational losses year-to-date and very substantial asset write-downs, and other charges associated with the Company's restructuring efforts, have reduced the book value of Olicom's equity to close to zero. Following the announced disposals to Madge and Intel, the Company's principal asset will be its controlling equity position in Digianswer. Olicom is in negotiations on the sale of its shares in Digianswer and expects to realize a substantial premium to book value.
Olicom plans to announce its second quarter and first half 1999 results, along with a more detailed review of its financial position, on September 30, 1999.
The Board of Directors will call for an extraordinary meeting of shareholders to be held in the autumn in order to decide on the Company's future.
About Olicom
More information on Olicom is available from the Company's SEC filings or by contacting the Company directly. See Olicom news, product, and service information on its Web site at olicom.com.
Olicom is a registered trademark.
Except for historical information contained herein, the matters discussed in this news release may contain forward-looking statements, involving risks and uncertainties that may cause actual results to differ materially. Among the factors that could cause results to differ are uncertain market conditions, overall demand levels for networking solution products, the timely development of new products, intense competition in the networking industry and the Company's ability to execute strategies efficiently and effectively. Further information may be found in Olicom's periodic filings with the US Securities and Exchange Commission (SEC), including the most recent reports on Form 20-F and 6-K, which identify important risk factors related to the Company's business that could cause actual results to materially differ from those contained in the forward-looking statements.
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Contact:
Olicom Group
Niels Christian Furu, CEO
Olicom A/S
+45 (45) 27 00 00
or
Soren Hovgaard
Director, Investor Relations
Olicom A/S
+45 (45) 27 00 00
sho@olicom.dk
or
Thomson Financial Investor Relations
Americas International
Ed Owens Angus Prentice
+1 (212) 510-9278 +44 (207) 395 7100
ed.owens@thomsonir.com angus.prentice@thomsonir.com |
