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Zintel settles with VeriFone for more than $22 mln

Friday 28th September 2012

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Zintel Group has reached an amicable settlement with VeriFone that was sparked by the loss of its exclusive deal with the US company.

News of the settlement comes in time for Zintel's annual meeting in Auckland today, where shareholders are voting on delisting and liquidating the company.

Zintel yesterday announced the sale of its Commit Services unit for $1.13 million, the last operating unit to be disposed of. The proceeds of that and the settlement with VeriFone will list cash in bank to more than $22 million, the company said.

"Zintel is pleased to advise it has reached an amicable settlement with VeriFone Australia (HAPL), with regard the termination of its distribution agreement for payment terminals in New Zealand," Zintel said.

"Whilst the terms of the agreement are confidential, Zintel anticipates that by early November once it has received settlement funds and together with the sale of Commit Services Ltd, cash in bank will be in excess of $22 million, with all subsidiaries either sold or no longer trading," it said.

The company abandoned its growth strategy when US companies VeriFone and Hypercom merged, with the result that VeriFone terminated Zintel's exclusive distribution agreement, dealing a "devastating" blow to the New Zealand's firm's Eftpos business.

The other development was the sale of its Australian toll-free calling business for $15.3 million to Delaware-based j2 Global, more than the Auckland-based company's entire market value at the time. Zintel shares last traded at 43 cents, having soared almost 200 percent in the past 12 months, valuing the company at $19.7 million.

The company made a distribution of 20 cents a share via a special dividend and buyback earlier this year.

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