Zintel Group sells Australian subsidiary for $15m - Updated

Kiwi business telecommunications firm Zintel Group has sold its Australian operation for $15.3 million, to worldwide company j2 Global.

The group now comprises of solution provider Zintel Cogent and consulting and support provider Commit Services. Between the two Zintel Group has around 200 employees.

Nick Gordon, chairman of the Zintel Group board, says the firm wasn’t looking to sell its Australian business, but j2’s offer was ‘considered attractive relative to the total market capitalisation of the group’.

With around $40m in annual revenue from its New Zealand operations, the group actually has no need for the cash, Gordon adds, and will distribute ‘a considerable portion’ to shareholders, partly through a return of capital.

Johan Scholtz, managing director of Zintel, says the move will also free up his time to focus on New Zealand.

"Some business units here are highly profitable but other parts of the business are not,” Scholtz says.

Update: Apple may be hoarding almost US$100 billion in cash reserves, but that hasn’t stopped kiwi tech company Zintel Group from announcing it will pay investors 20 cents per share after the sale of its Australian subsidiary left the organisation with plenty of money in the bank.

Nick Gordon, chairman of the board for Zintel Group, says with existing cash reserves, the organisation ‘has no need for additional funds, and is therefore returning a considerable portion of the sale proceeds to shareholders’.

"This will be in the form of a capital repayment equivalent to 9.75 cents per share, and a special dividend of 10.15 cents per share fully imputed.”

"After both payments the company will still retain around $8m cash in bank.”

The payment should come through on April 13.