Transplants revive tech-wreck victims

By PETER GRIFFIN

A couple of penny dreadful tech-wreck victims are being born again as their listed shells are filled with new companies and investment.

Amphibious boat-maker Sealegs, which acquired its listing through the demise of failed venture capitalist IT Capital, claims orders for the boat will bring in $1 million up to mid-year.

Meanwhile, shareholders of stalled tech investor Strathmore Group have endorsed a plan to change the name of the company to Media Technology, and undertake a share issue that effectively saves Strathmore from liquidation.

Late last year Strathmore agreed to buy Digital Disk Holdings for $8.7 million through the issue of around 72.2 million Strathmore shares at 12c each.

DDH owns Software Images and Australian sister company Media Technology, which both provide CD and DVD manufacturing services.

Approval of that deal was given at Strathmore's annual meeting yesterday. It will also undertake a 40 to 1 share consolidation, reducing the shares on issue from 191 million to 4.8 million.

DDH will end up owning 88 per cent of Strathmore, but has to reduce that to below 75 per cent within 12 months, a step that will be undertaken via a share issue.

The deal mops up Strathmore's financial mess, generating cash to repay a $154,000 loan to Cullen Capital and cover transaction costs. But shareholders who have seen their portfolios wither will be heavily diluted.

DDH said it expects to have revenue for this year of $19.7 million and earnings before interest, tax, depreciation and amortisation of $1.9 million.

Strathmore's chairman, Phil Norman, was confident the deal would see "a restoration in the value of our shareholdings" after a disastrous period.

"The last couple of years of 'cleaning up' Strathmore has been a very difficult, frustrating, time consuming and personally expensive task," he said.

Sealegs, which officially debuted on the NZX last month, was producing boats and filling orders after overcoming a legal challenge to its Digital Video Imaging stake and shedding the baggage of IT Capital.

Chief executive David McKee Wright said most of Sealegs' first 12 boats had been sold. He and business partner Maurice Bryham own most of the company.

Sealegs continues to hold on to its 19 per cent stake in 3D screen maker Deep Video Imaging.