Patsystems is to dispose of its 40 per cent shareholding interest in Chicago-based introducing broker eLocal for £575,000.
ELocal's client base consists of traders, both electronic and professional floor traders, on the Chicago Board of Trade, Chicago Mercantile Exchange, Liffe and Eurex.
Patsystems's investment in eLocal was part of the company's strategy to develop its North American business. The company now believes that its continued ownership of a minority interest in an introducing broker will create potential conflicts with other customers.
David Jones, CEO of patsystems, says: "We have agreed with eLocal a mutually beneficial contract that allows their senior management to acquire our shares. We can now concentrate on working to support them as a customer whilst they develop their business further."
ELocal has repaid an intercompany loan to patsystems, which at 31 December 2001 was £142,000. The Chicago broker has also signed a formal software licence agreement.
The consideration is to be settled in cash in eight equal quarterly instalments starting on 25 September 2002. The deferred consideration is secured over certain assets of eLocal by way of a loan note. The cash proceeds from the disposal will be placed on deposit.
At 31 December 2001, patsystems' investment in eLocal was held in the books of the company at a net book value of £382,000 and the share of loss taken in the company's profit and loss accounts for the year to 31 December 2001 relating to the company's investment in eLocal was £54,000.