Danka Business Systems begins winding down business after shareholders approve liquidation

By Lisa Kerner

Charlotte, N.C., Feb. 19 - Danka Business Systems plc shareholders voted to approve the company's entry into a members' voluntary liquidation at an extraordinary general meeting held in London on Thursday.

As a result, the net proceeds from the June 2008 sale of Danka Office Imaging Co. to Konica Minolta Business Solutions U.S.A., Inc. will be distributed.

Danka said holders of the company's ordinary shares and American Depositary Shares will receive a cash amount equal to $0.03 per ordinary share, or $0.12 per ADS, "as soon as practicable."

The payments will be made under Danka's agreement with holders of its convertible participating shares.

Any remaining cash balance after payments to the holders of ordinary shares and ADSs will be distributed over time to the participating shareholders, a Danka news release said.

It was previously reported that of the $240 million Konica paid for Danka's imaging business, $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.

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 initially $40 million but have been reduced to $37.4 million due to Danka's ongoing expenses, according to a Jan. 20 news release.

Jeremy Spratt and Finbarr O'Connell of KPMG LLP have been appointed joint liquidators for the purposes of the voluntary winding up of the company, according to Danka.

St. Petersburg, Fla.-based Danka Business Systems, prior to the sale of Danka Office Imaging, provided office imaging equipment, software, support and related services and supplies in the United States.

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