Tolle News bei Fortune City ( 919383 )!!!
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FortuneCity.com Inc. Sells Shareholding in US Affiliate " Hosted Solutions" for $692,000 Cash and Finalizes Closure of Its British Subsidiary for a Gain of $1.1 million.
New York, October 5, 2004 - FortuneCity.com Inc. announced today that it has sold its shareholding in US affiliate Hosted Solutions (formerly known as Springboard Managed Hosting) and agreed to liquidate its UK subsidiary which ceased trading in 2002.
Following a strategic review of its business, FortuneCity has sold 100% of its shareholding in Hosted Solutions for $692,000 in cash. This transaction represents a 246% return on FortuneCity's original investment of $200,000 made in August 2001. The sale increases FortuneCity's cash balance by approximately 70% to $1.6 million at September 30,2004, and provides additional security for the growth of its core business.
FortuneCity invested in Hosted Solutions as part of an arrangement to co-locate its web infrastructure in Hosted Solution's first data center. Earlier this year the Company transferred its hosted infrastructure to another co-location data center facility thereby eliminating any operational relationship with Hosted Solutions.
Peter Macnee stated " Our original investment in Hosted Solutions was operational in nature as we agreed to co-locate our hosting infrastructure in their data center. Once we decided to transfer to a new data center, we became a non-strategic minority investor in a privately held firm. This transaction provides us a tremendous return on our investment, and the ability to put additional capital to work to grow our core businesses while improving our longer term financial viability and security."
The investment had been accounted for under the equity method which required the Company to record its pro-rata share of gains and losses and to eliminate inter-company profits. Just prior to the sale the investment was valued at $12,000 on the Company's books resulting in a gain on the transaction of $680,000.
In September 2004, agreement was reached with the court appointed liquidator to liquidate the Company's UK subsidiary. A final payment of approximately $14,000 will be made by the Company in final settlement of other current liabilities on the Company's books in excess of $1.1 million. A gain of approximately of $1.1 million will be recorded on this transaction.
As a result of these two transactions, working capital will increase by approximately $1.7 million from $(1.1) million at June 30, 2004 to approximately $600,000 at September 30th 2004.
(Quelle: FortuneCity.com Inc.)
05.10.2004 08:56
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