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Danka Business Systems sets Feb. 19 meeting date for liquidation vote
By Lisa Kerner
Charlotte, N.C., Jan. 20 - Danka Business Systems plc will hold an extraordinary general meeting on Feb. 19.
Shareholder will be asked to approve a voluntary liquidation to distribute the net proceeds from the June 2008 sale of Danka Office Imaging Co. to Konica Minolta Business Solutions U.S.A., Inc., according to a schedule 14A filed with the Securities and Exchange Commission.
Holders of Danka's American Depositary Shares are not entitled to attend the meeting, Danka said, but are asked to return their voting instructions.
Konica paid $240 million for the imaging business. Danka said of that amount, $10 million was held back by Konica for Danka's purchase price adjustments. An additional $25 million is being held in escrow for up to four years to satisfy any claims made by Konica under a stock purchase agreement, the filing said.
Danka said $146 million of the sale proceeds were used to repay Danka's credit facilities provided by General Electric Capital Corp. and to pay some change-of-control and severance obligations as well as fees and expenses associated with the sale transaction.
Net proceeds to be distributed were $40 million but were reduced to $37.4 million due to Danka's ongoing expenses.
Danka said that it is "unlikely that the return on the current investment of the cash held by the company will outpace the ongoing costs of the company in its current status."
Prior to the sale of Danka Office Imaging, St. Petersburg, Fla.-based Danka Business Systems provided office imaging equipment, software, support and related services and supplies in the United States.
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