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Non-Tech : GENI: GenesisIntermedia.com Inc -- Ignore unavailable to you. Want to Upgrade?

To: blebovits who wrote (182)	7/18/2001 12:08:27 AM
From: Sir Auric Goldfinger	Read Replies (2) \| Respond to of 574

Isaac's pal the gun runner:"Khashoggi Pares Stake In GenesisIntermedia By CASSELL BRYAN-LOW Staff Reporter of THE WALL STREET JOURNAL Adnan Khashoggi, the Saudi Arabian financier, has scaled back his stake in GenesisIntermedia Inc., a Los Angeles interactive marketing firm. Mr. Khashoggi, through his Bermuda-based holding company, Ultimate Holdings Ltd., had steadily built up an ownership in GenesisIntermedia since the beginning of last year. At the end of May, Ultimate Holdings owned 9.4 million shares in the company, representing 43.1% of the 21.9 million company shares outstanding as of the end of April. Forms filed last week with the Securities and Exchange Commission report that Mr. Khashoggi's group has reduced its GenesisIntermedia holdings, cutting its ownership stake to 8.7 million shares, or a 38.4% stake. While Ultimate Holdings has intermittently sold shares as overall holdings increased, June was the first month that more shares were sold than bought. (Since it began buying shares in the company in February 2000, Ultimate Holdings has sold 2.1 million GenesisIntermedia shares for $18.2 million. Dollar and share amounts have been adjusted for a 3-for-1 share split in March 2001.) Mr. Khashoggi, whose connection with GenesisIntermedia was first disclosed in January, couldn't be reached to comment. GenesisIntermedia Chief Executive Ramy El-Batrawi said he had asked Mr. Khashoggi to reduce his holdings in order to provide "for wider distribution [of the shares] amongst institutions."[offshore non-filing ones perhaps?] Shares of GenesisIntermedia -- which has a disparate mix of businesses including operating advertising kiosks in shopping malls, producing infomercials for self-help videos, and renting cars -- have more than tripled since Mr. Khashoggi's holding company began buying shares. Ultimate Holdings has purchased about 10.3 million shares since February 2000, at prices of between $5 and $17 a share, valued at $59.4 million. Those shares would now be worth more than $182 million, based on the company's price of $17.66, off 13 cents, in 4 p.m. Nasdaq Stock Market trading Tuesday. The stock, which has hovered around $17 since May, surged temporarily following a June 29 announcement that the company had received a "conditional commitment" from New York based financier Carl Icahn and his Riverdale LLC investment vehicle to provide a $100 million credit facility to fund acquisitions by GenesisIntermedia. (Any loan has to be approved by Mr. Icahn's Riverdale group and terms are to be decided on a loan-by-loan basis.) According to SEC filings, Ultimate Holdings' purchases of GenesisIntermedia last year were funded by "working capital" as well as loans from "Deutche Bank pursuant to an open-ended line of credit." A spokesman for Deutsche Bank AG, the huge German banking firm, said he was unaware of a credit agreement or other banking relationship with either Mr. Khashoggi or Ultimate Holdings. Mr. Khashoggi and Mr. El-Batrawi first met in the late 1980s when they worked together for several years representing American companies -- such as hotel chains and airplane manufacturers -- looking to expand into the Middle East and Europe. Mr. Khashoggi first became involved with GenesisIntermedia in November 1999, when Mr. El-Batrawi asked him for some financing help, says Mr. El-Batrawi. Since then, Mr. Khashoggi has provided at least $51 million in credit facilities to GenesisIntermedia, of which $38 million was outstanding in May, according to the company's latest proxy statement. In addition, GenesisIntermedia has received more than $1 million in "short-swing profits" from Mr. Khashoggi during 2000 and the first quarter of this year. The SEC requires company insiders or 10% shareholders who buy a stock and then sell it within six months to hand over any profits made on the sale to the company. Ultimate has sold almost as many shares again in the second quarter of this year and GenesisIntermedia expects to record more short-swing profits in its current-quarter earnings, due mid-August. Mr. Khashoggi's sizable investment in GenesisIntermedia -- and the company's soaring stock price -- has come despite widening losses at the company. The company reported a net loss of $7.7 million in the first quarter, compared with a year-earlier loss of $5.1 million. (The company reported net income of $1.4 million for 1998, a net loss of $8.3 million for 1999, and a loss of $33.5 million for 2000.) The company attributes the losses to higher expenses related to promoting new products as well as expanding its Centerlinq network of shopping-mall kiosks. Selling and general administrative expenses have increased over the past two years to $52.5 million in 2000 from $8 million in 1998. Revenue over the period increased to $42.3 million in 2000 from $14.9 million in 1998. Mr. El-Batrawi says the company expects quarterly losses to narrow.