Durban - Quick Holdings (Quickco), the container, bulk logistics and transport contracting company, would not be affected by the outcome of its R7,9 million damages claim, Glen Passmore, a Quickco director, said last week.
Quickco had been locked in an eight-month legal battle with Guarantee Provident Finance (GPF), a financial services group, and King Consolidated Holdings (Kingco), a holding company for franchised restaurants, pubs and takeaway outlets, over the failed sale of Kingco`s subsidiary, Lusitania Food Products.
The deal went sour in January when Quickco shareholders approved the R61 million deal but Kingco shareholders rejected it. The deal involved the sale of Kingco`s shares in Lusitania to GPF which would, in turn, sell them to Quickco.
An independent arbitrator ruled that the agreement was valid but said that under the circumstances he could not order Kingco to hand over Lusitania.
He therefore put the ball in Quickco`s court to cancel the agreement and claim damages.
Passmore said the cancellation had effectively put Quickco back 16 months in its acquisition strategy.
"Quickco shareholders had approved a company name change to Lusea Holdings, as well as a listing transfer from the development capital to the food sector of the JSE and a restructure of its share capital. All this had to be shelved and Quickco couldn`t pursue any other acquisitions until the agreement was cancelled," he said.
The acquisition was intended to pull Quickco out of the red. At the time of the acquisition, Quickco had been trading at between 2c and 3c a share for several months.
The company reported a massive loss for the year to June 1998, but had returned to profitability during the six months to December. Earnings a share were, however, still negligible at 0,08c. Results for the year to June 1999 had been delayed but would probably be released this week, Passmore said.
"The company will continue to look for suitable acquisitions to improve its performance through growth. The damages claim will not affect this strategy or the company`s future," he said.
Dennis Finch, Kingco`s managing director, said he did not dispute the validity of the agreement but questioned whether Quickco had suffered damages, as the fixed asset value of Lusitania was far lower than its purchase price.
"Kingco will defend the claim vehemently and firmly believes it will be successful," he said.