2 Proposed Transactions/Commence.of Restructure&Reconstruct.
Thu 25 Oct 2001
Published: Thu 25 Oct 2001 11:57:49
Document No: 143264
Document part: A
Market Flag: Y
Classification: Asset Disposal
PSIRON LTD 2001-10-25 ASX-SIGNAL-G HOMEX - Brisbane +++++++++++++++++++++++++ CONTINUOUS DISCLOSURE REQUIREMENTS LISTING RULE 3.1 Pursuant to Listing Rule 3.1 we wish to advise the market of two proposed transactions which mark the commencement of the foreshadowed restructure and reconstruction of your company. The result of the restructure will be to substantially increase the sustainable earnings base from the diagnostics business and to add value to the biotech asset base which will form the foundation of future earnings. In brief Psiron Ltd is proposing to sell its diagnostic interests for $1,600,000 as well as making an $800,000 investment in Analytica Ltd. This compartmentalisation of the therapeutic and diagnostic division allows the Company to focus the business. These transactions are subject to shareholders approval. An Explanatory Memorandum and Independent Experts report and other relevant documentation giving full details of the transactions, are currently being prepared. This information will be included with the Notice of Meeting of members, which will be despatched shortly. The first proposed transaction (the sale of the Diagnostics business - refer to appendix 1 for details) is a continuation of and natural part of the business strategy of the company's development and sale of IP. The Diagnostic business grew out of the development of the company's IP into a manufacturing and distribution enterprise. It is now appropriate for the company to realise the value of the organic growth that has occurred with the development of its IP. The transaction results in the sale of the Company's diagnostic interest for $1,600,000 in convertible notes to Analytica Ltd. The value of the transaction is based on 6 times adjusted profitability of the diagnostic interest and includes the sale of inventory and fixed assets at book value (at June 30 these had a value of $363,000), as well as use of IP licences which have no book carrying value. These assets represent 10% of the Company's total June 30 audited assets. The sale realises a profit on the Company's development of IP. The second proposed transaction (an investment in Analytica Ltd of $800,000 - refer to appendix 2 for details) gives the Company a controlling interest in Analytica Ltd. This transaction gives Psiron Ltd access to, and control of additional IP that the directors believe has significant potential value. It also maintains the Company's control over the diagnostic interests. This provides continued upside to the Company's shareholders from any coutinued growth that occurs in the diagnostic business. An Explanatory Memorandum and Independent Experts report and other relevant documentation giving full details of the transactions are currently being prepared. This information will be included with the Notice of Meeting of members, which will be dispatched shortly. The shareholders have been previously advised of the proposed reconstruction and the growth of IP in the biotechnology area. These transactions form part of this strategy. Please contact the company if you require further information. S Jones CHAIRMAN MORE TO FOLLOW