Cellnet waves goodbye to Mercury

Despite being a profitable business Cellnet has asked shareholders to demerge its Mercury Mobile business.

Mercury is a mobile phone content and entertainment providers in Australia and New Zealand with operations in Canada and the UK.

Adam Davenport (picture), managing director at Cellnet said the decision was put forward to the board at the distributor’s AGM.

“Mobile content is now a substantial and growing global market and it is clear that the time is right to unlock the value of Mercury for Cellnet shareholders,” he said.

According to Davenport the demerger would take place through a capital reduction and share distribution to Cellnet shareholders in the ratio of approximately 1.5 Mercury shares for every one Cellnet share.

After the demerger Mercury will seek to raise $3 million from fully underwritten non-renounceable rights issue and apply for and ASX listing.

Ben Grootemaat will be appointed as the managing director of the new Mercury and Mel Brookman, currently a Cellnet director, will as act as chairman of the mobile content company until a permanent one is appointed.